L&T shares gain after FIPB approves unit's FDI proposal

Company's shares climbed 2.85% to Rs 1081.6 at the close on the BSE after rising to Rs 1,085.9

Larsen and Toubro shares gained today after the government approved a Rs 1,000 crore foreign direct investment proposal of its infrastructure arm.

L&T shares climbed 2.85% to Rs 1081.60 at the close on the BSE after rising to Rs 1,085.90. The stock contributed the most to gains in the benchmark Sensex, which added 110.69 points.

L&T Infrastructure Development Projects got the go-ahead to allot securities to a wholly owned subsidiary of Singapore-based CCP Investment, entailing a foreign fund inflow of Rs 1,000 crore.

The Foreign Investment Promotion Board said February 20, that it has approved the proposal, L&T said in a BSE filing. The investment in L&T Infrastructure Development Projects will be made through equity shares, compulsorily convertible preference shares or debentures.

The investment is subject to finalisation and execution of definitive agreements with the investor and receipt of necessary regulatory and other approvals, L&T said.

L&T Infrastructure Development Projects is engaged in public-private partnership projects in the country such as roads and bridges, ports, metro rail projects, wind energy and power transmission lines.

The Hyderabad metro rail project, expected to be operational in 2015, is among its major projects. It also has a 50% stake in Odisha's Dhamra port.

L&T had said on December 20 it is in talks with a large global institutional investor for a partial stake sale in L&T Infrastructure Development Projects in two tranches, involving Rs 2,000 crore of investments.

The initial issue of Rs 1,000 crore of securities will be followed by the second tranche of an equal amount after 12 months.