L&T Finance plans to raise Rs 1575 cr from IPO

NEW DELHI: L&T Finance Holdings Ltd plans to raise Rs 1,575 crore via initial public offering (IPO) that will open on July 26 in a largest listing in India so far this year. Indian markets are however still trying to find a grip on various global events which have made markets directionless.

However upcoming Reserve Bank of India's policy meet next week on July 26 might provide some direction and we might be able to move out of this range.

The offer will be open for anchor investors on July 26, while it will open for retail bids the next day.

L&T Finance Holdings Ltd, a unit of Indian engineering conglomerate Larsen & Toubro earlier this month raised Rs 3.3 billion through a share placement to U.S. private-equity fund, Capital International at Rs 55 per share.

"The group will announce dilution of L&T's stake by this weekend", says Y.M Deosthalee, CMD, L&T Finance Holding in an interview with ET Now.

L&T Finance Holdings plans to use the funds from the issue to repay an inter-corporate deposit to its promoter group for Rs 345 crore. It also plans to pump Rs 570 crore in L&T Finance and Rs 535 crore in L&T Infrastructure Finance Company Ltd.

L&T Finance Holding Ltd offers a diverse range of financial products and services across the corporate, retail and infrastructure finance sectors, as well as mutual fund products and investment management services, through our direct and indirect wholly-owned subsidiaries.

The company has a diversified loan book, strong distribution network, experienced management team, strong backing of brand name and being a front-runner for banking licence might make L&T Finance Holdings an attractive bet.

"L&T Finance and L&T Infra Finance Company are both non-banking finance company and are regulated by Reserve Bank of India", says Deosthalee.

L&T Finance is an asset finance company classified as an asset finance company while L&T Infra Finance is a specialized infrastructure finance company and very recently it has received the Public Financial Institution (PFI) status from the Government of India.

The group may list 2 NBFCs under holding company later, adds Deosthalee

At 11:34 AM, shares in Larsen & Tourbo Ltd were trading marginally higher at Rs 1,791 on BSE.

Thirteen IPOs that were listed on the bourses since April this year and majority of the listings were along the issue price.

Highway projects to open up Rs 42K-cr infrastructure biz ...

“In road building, 70 per cent is used in buying raw material, around 20 per cent goes in labour cost and the rest goes into machines,” said a World Bank official, who did not want to be identified.

The official added that this was also bound to increase the country’s import bill because cement and bitumen are imported from countries like Bangladesh and Iran.

In the current financial year, NHAI has announced to award 59 projects with a total project cost of around Rs 60,000 crore. Though the demand from projects awarded this year will be spread over the period of construction, which is normally three years, the current demand also comes from the ongoing projects.

India is the world’s second-largest producer of cement. It has also outpaced the growth rates of other prominent industries on the back of factors such as rising demand from the housing sector, increased activity in infrastructure, and construction recovery. The cement industry sustained its growth rate even during the economic slowdown. It is anticipated that the annual cement output in the coming years will grow at around 12 per cent during 2011-14 to reach 303 million tonnes (mt).

Cement consumption over the years has grown by more than nine per cent and is expected to take the growth rate in double digits.

With vast road development and maintenance happening across the country, bitumen consumption is also seeing huge growth.

This huge demand has led to a demand-supply mismatch, leading to increased import. “Not only does the import bill increase, the quality is also a question. Like a lot of developers are importing bitumen from Iran — the quality of which is questionable,” said the World Bank official.

Some believe that the economic impact of roads is the highest, as the roads not only boost consumption in terms of raw material but also provide connectivity to the far-flung areas.

“Roads not only provide economic impetus in terms of consumption but also provide connectivity to far-flung areas, giving them access to the markets that helps in improving the economic condition of the area. The kind of impact roads have cannot be matched by any other mode,” said Amrit Pandurangi, senior director at consultancy firm Deloitte.

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