L&T IDPL eyes ₹4,000 cr via InvIT

Ksenia Kondratieva Mumbai | Updated on January 10, 2018

R Shankar Raman, CFO, L&T

Larsen & Toubro has identified five assets to be monetised through the infrastructure investment trust (InvIT) route, R Shankar Raman, L&T’s Chief Financial Officer, told BusinessLine. The size of the issue, he said, could be ₹3,500-4,000 crore.

BusinessLine had earlier reported that L&T Infrastructure Development Projects Ltd (L&T IDPL), a subsidiary of L&T, submitted the application for registration of the InvIT to SEBI on September 1.

“We are waiting for SEBI to approve the document. Normally it takes one-two months; we are trying to push it,” Raman said. The company’s decision to hit the market comes several months after the first two InvITs — IRB InvIT Fund (of IRB Infrastructure Developers) and IndiGrid Trust (Sterlite Power) — went public in May. Both InvITs have been trading below their issue price. “We did take time (to decide on the issue); we didn’t want to be the first ones for a simple reason: we have a certain brand that we cannot damage,” Raman explained.

“We were not very comfortable because we were not getting clarity on how prepared the investors are. Now, as two entities have gone out, the platform has got established, so we sort of mustered up the courage to go and explore,” he said.

Having the Canada Pension Plan Investment Board (CPPIB) as a partner in L&T IDPL was another reason for L&T to “wait and watch”, Raman added.

The CPPIB has invested ₹2,000 crore in L&T IDPL.

L&T IDPL currently has around 20 assets, most of them road SPVs, and is also implementing the Hyderabad Metro Rail Project and the Kudgi Power Transmission Line project in Karnataka.

Recycling capital

While Raman has not specified which assets will be placed under the InvIT, he said the valuations and pricing will be “realistic” as, by selling the assets to the InvIT, the company is looking at recycling capital rather than just releasing liquidity, unlike some other infrastructure developers.

Published on September 21, 2017

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