The Larsen & Toubro Finance Holdings introduces its initial public offering (IPO), to which the Aditya Birla Money suggests investors to make long term subscription as the offer was beneficial, reveals a report. The company L&T Finance Holdings is a financial holding company, which introduced various financial schemes and products through its operating subsidiaries.

The initial offering made by the company was Rs 59 at the upper and Rs 51 at the lower price band. The issue is priced at ~2.9x and ~2.5x its pre issue book value of `20.4 as of March 2011. On its post issue book value of Rs 26.5 and Rs 25.9 at the upper and lower price band respectively, the issue is priced at ~ 2.2 xs and ~ 2.0 xs.

Presently, the equity of the company was focused to enlarge the capital base which will further give way to increase its control on the loan sector. Moreover, the returns will increase after the gains from controlling the loan book take place.

As per the report, “Given the pedigree and trust, it is an excellent long term bet; however listing gains would largely be a function of market conditions and going by the current market parity, we believe the short term gains would be at best marginal. Therefore recommend long term investors to subscribe to this issue”.