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L&T Technology Services, a wholly-owned subsidiary of L&T, is putting finishing touches to its IPO, which is slated to hit the market later this year, as it looks to take on larger competitors in the engineering R&D segment.
While the subsidiary of India's largest engineering company has not set a timeline, sources in the company confirmed that it will happen this year. Newly appointed Managing Director and CEO Keshab Panda, told BusinessLine : “All I can say is that our (L&T) chairman (AM Naik) has said that the IPO will happen this year.”
L&T, one of the largest players in the infrastructure sector, hived off its engineering R&D arm as a separate unit in 2014, which now has a turnover of $500 million. The plan now is to take the company public as it seeks to build on its position of being one of the leading engineering R&D providers. Interestingly, L&T Infotech, another subsidiary of L&T, is also planning to launch an IPO this year.
For L&T Tech Services, Internet of Things combined with the increasing digitalisation of business processes happening in the US and European countries, are seen as big business opportunities. This, coupled with a sizeable engineering talent pool, could act as differentiators in an area which is getting increasingly crowded. “When we talk about IoT, it is not just getting data from industrial machines and analysing it but also designing systems,” said Panda.
One of the other reasons that the company believes sets itself competitively the marketplace is the fact that technologies like IoT seem to be have graduated from information heads of companies to Board members. “They have bought into this concept as they see it in all walks of their lives,” said Panda.
Analysts seem to have bought into the capabilities of L&T Tech Services.
“The key differentiators for L&T Technology Services has been their strong core engineering culture and their investments in lab infrastructure for both embedded and mechanical capabilities. This has helped them build expertise in the verticals they operate in and come up with innovate solutions,” Sidhant Rastogi, Partner and Practice Head, Zinnov, wrote in a report few months ago.
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