L&T Info IPO, nine years in making, may fetch parent firm ₹1,234 crore
Updated: Jul 04, 2016, 07:44 IST
MUMBAI: The proposed offer for sale of equity in L&T Infotech, India’s sixth-largest software exporter, is likely to generate large returns for the parent company L&T, apart from symbolising one of the last major initiatives by the group chairman AM Naik when he retires in 2017.
The scheduled float of L&T Infotech on July 11 — a sale of 10.8% of the equity, or 17.5 million equity shares, at a price band of ₹705-710 a share — is expected to raise about ₹1,234 crore, which will flow to the parent firm L&T.
L&T, India’s largest engineering conglomerate, has recently initiated a major restructuring exercise top are down the number of group firm to 15 from 21.
The listing of L&T Info tech has been in the making for close to nine years, with the firm deferring plans most of the time due to adverse market conditions.
It is widely expected that as Naik looks set to retire in 2017, and his successor, likely to be SN Subrahmanyan, takes charge, this will be one of the last major tasks Naik has set for himself.
“Divestment of the roads portfolio, apart from stake sale in IT and tech services, should release funds for the company as well as reduce losses by ₹300 crore ,” said Nomura research analysts Amar Kedia and Priyankar Biswas.