L&T seeks FIPB nod for Rs 2,000-cr infusion in IDPL

Larsen & Toubro, the engineering conglomerate, said on Friday it had sought approval from the Foreign Investment Promotion Board (FIPB) for a foreign direct investment (FDI) proposal which could infuse as much as Rs 2,000 crore into its infrastructure business.

“The company is engaged in discussions with a large global investor for the proposed acquisition of a stake in L&T Infrastructure Development Projects (L&T IDPL),” the company told the stock exchanges.

The unnamed global investor is looking to initially infuse Rs 1,000 crore. This could be followed by a second tranche of Rs 1,000 crore or such higher amount as agreed between investor and the company. The second round will be a year after the initial investment, which will be subject to further approvals as and when required.

L&T, however, added the present deal for foreign investment had yet to see any signed agreement. “The company will provide further updates if necessary,” it said. The deal is subject to due-diligence processes, agreement on governance, regulatory and authority approvals and market conditions.

L&T IDPL owns and is to operate the Hyderabad metro rail; the project cost is Rs 16,400 crore and it is expected to start operations in 2015. It also has around 50 per cent stake in the Dhamra port project in Odisha, which it is operating. The company also owns highways projects, 10 operational, and nine under implementation.  

The parent company, L&T, considered monetising its infrastructure business by going for an Initial Public Offer around two years earlier. However, market conditions were not conducive. The company had tried to monetise individual infrastructure assets as well.

The infrastructure major also warned its investors to exercise caution while dealing with the company’s securities, pending definitive announcements. “In the event of any doubt, shareholders and other investors should consult their stock brokers, solicitors, bank managers, accountants and other professional advisors,” it advised.