Laser Power IPO: Valuations reasonable, should you subscribe? What GMP hints at

The initial public offer (IPO) by Laser Power & Infra Ltd, an integrated power infrastructure company with operations across manufacturing and EPC segments, kicked off for public subscription on Thursday, July 9. The 742-crore issue, which comprised of a fresh issue of Rs 542 crore and offer for sale (OFS) of Rs 200 crore, is being offered in the price band of Rs 203–214 per share, valuing the stock at 25.3 times on a post-issue basis. This is significantly lower valuations than some of its larger peers and in line with peer of similar size. Analysts have 'Subscribe' rating on the IPO. 

"At the upper price band, the company is valued at 19.8 times FY26 EPS and 12.6 times EV/Ebitda, representing a meaningful discount to the listed peer average of approximately 36 times EPS and 24 times EV/Ebitda. The valuation appears reasonable considering the improving business mix and favourable industry outlook," said DR Choksey Research.

The brokerage has 'Subscribe' rating on the stock. 

Listed peers of Laser Power & Infra included Apar Industries Ltd, KEI Industries, Polycab India Ltd, Dynamic Cables Ltd and Universal Cables. Swastika Investmart in a note said the IPO is price at lower valuations than peers like Apar Industries and KEI Industries. It said the company's order book of Rs 3,243 crore provides healthy revenue visibility for the next 12–18 months.

"Subscribe for the medium to long term on attractive valuations, lower debt, and strong sector prospect," it said.

In the grey market, the grey market premium (GMP) for Laser Power was steady at Rs 15 apiece, suggesting a potential listing gain of about 7 per cent for investors.

SBI Securities noted that Laser Power & Infra delivered revenue, Ebitda and adjusted profit growth of 15.4 per cent, 39 per cent and 72.5 per cent, respectively between FY24 and FY26. It said the company is a strategically located cable and conductor manufacturer in East India catering to the power transmission segment. "The location advantage along with its partnership with leading global player gives it an edge over its peers," it said.

Laser Power & Infra plans to utilise the IPO proceeds for debt reduction, which should reduce the interest cost and help improve profitability. SBI Securities recommended investors to 'Subscribe' to the issue with a LONG TERM investment horizon. 

Choice Broking said the proposed utilisation of a significant portion of the fresh issue proceeds towards debt repayment is expected to reduce finance costs, strengthen the balance sheet and further support earnings growth and net profit margins. 

Choice said the company is backed by a diversified product portfolio, expanding EPC presence and favourable long-term industry tailwinds driven by rising investments in India's power transmission and distribution infrastructure. 

"Laser Power & Infra is well-positioned to sustain its growth trajectory. At the upper price band, the issue is valued at P/E of 19.8x and an EV/Sales of 1.4 times, relative to its listed peers, considering its integrated business model, improving financial profile and deleveraging-led earnings potential. Accordingly, we recommend investors “Subscribe for Long Term," it said.

A total of three of the four promoters participating in the OFS.