<article>Shares of <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=L%26T+Infotech+Ltd">L&amp;T Infotech Ltd</a> fell 6.11% on debut even though the issue was subscribed more than 11 times last week. This is the first issue in nearly four months to open at a discount.</article>

Shares of <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=L%26T+Infotech+Ltd">L&amp;T Infotech Ltd</a> fell 6.11% on debut even though the issue was subscribed more than 11 times last week. This is the first issue in nearly four months to open at a discount.
L&amp;T Infotech shares opened at Rs.666.60 on the BSE on Thursday compared to the issue price of Rs.710 per share. At 12.22 pm, they were down 0.63% at Rs.705.55 on the BSE, while benchmark 30-share Sensex traded 0.29% lower at 27,835.12 points. L&amp;T Infotech shares touched a high of Rs.699, and a low of Rs.666.
The last primary issue to list at a discount was <a style="color: #000080; text-decoration: underline;" href="http://www.dealstreetasia.com/?s=HealthCare+Global+Enterprises+Ltd">HealthCare Global Enterprises Ltd</a> (HCG), which runs cancer care centres. The stock fell more than 20% compared to its issue price when it started trading on 30 March.
The IT unit of top engineering and construction firm Larsen and Toubro Ltd (L&amp;T) saw its Rs.1,243 crore initial public offer (IPO) getting subscribed 11.69 times. The issue was priced at the upper end of the price band of Rs.705-710 per share. The company had offered a discount of Rs.10 per share for retail investors. The IPO was a pure offer for sale with L&amp;T selling about 10.3% of its stake in the firm.
The disappointing listing may be partly because of weak earnings reported by large IT services companies.
On Tuesday, Wipro Ltd joined its larger peers <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Tata+Consultancy+Services+Ltd">Tata Consultancy Services Ltd (TCS)</a> and Infosys Ltd in reporting disappointing earnings. Some of these companies have guided towards lower than expected growth in the current fiscal.
Infosys, the country’s second largest software services exporter, lowered its full-year revenue forecast, prompting investors to punish the stock. Sector leader TCS reported a 3.7% sequential increase in dollar revenue for the quarter ended June. However TCS reported a lower 3.1% quarter-on-quarter growth in constant currency terms, meaning its growth improved by 60 basis points on account of currency fluctuations.
Ahead of the L&amp;T Infotech IPO, brokerages had noted that the pricing of the issue may leave scope for moderate listing gains but had cautioned on challenges the company has faced in recent years.
In a note on 11 July, Emkay Global Financial Services Ltd noted that the issue pegs the price-to-earnings ratio (P/E) for L&amp;T Infotech at around 14 times and 12 times respectively for fiscal years 2017 and 2018. This leaves scope for modest listing gains since it values the company at a discount to mid-tier companies like Mindtree Ltd and Hexaware Technologies Ltd, said the brokerage.
However, Emkay Global Financial Services noted that the company has gone through difficult times in recent years.
“The company seems to have struggled through recent years on account of significant leadership churn and missing several strategic inorganic growth opportunities,” Emkay Global Financial Services said in the note.
The weak listing of L&amp;T Infotech will be dampener for the group’s plans to sell 15% stake in another of its units—L&amp;T Technology Services Ltd.
L&amp;T Technology Services is a pure-play global engineering, research and development services company.
Also read:
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/lt-to-sell-15-stake-in-lt-technology-services-via-ipo-47607/">India: L&amp;T to sell 15% stake in L&amp;T Technology Services via IPO</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/lt-infotech-ipo-subscribed-1-12-times-on-day-1-47115/">India: L&amp;T Infotech IPO subscribed 1.12 times on Day 1</a>
<h4 style="text-align: justify;">This story was first published on <a href="http://www.livemint.com/Money/xoHJj0L7R2sT0cIJvJ2xTO/LT-Infotech-shares-fall-611-first-IPO-to-open-at-a-disco.html">livemint.com</a></h4>

L&T Infotech shares opened at Rs666.60 on the BSE compared to the issue price of Rs710 per share

India: L&T Infotech scrip falls 6.11%, first IPO to open at discount in 4 months

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India: L&T Infotech scrip falls 6.11%, first IPO to open at discount in 4 months

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