L&T Finance extend gains as Morgan Stanley buys stake; up 8% in two days

Shares of L&T Finance extended their gains on Friday, rising 4.5 per cent at Rs 183.20 per share on the BSE in Friday’s early morning deals. The stock has rallied 7.6 per cent in the last two trading sessions. This came after Morgan Stanley Asia acquired a large portion of L&T Finance shares, which were sold by Bain Capital's affiliates—BC Asia Investment VI and BC Asia Growth Investment—alongside BNP Paribas Financial Markets. 

The three entities collectively divested 8.82 crore shares, equating to 3.5 per cent of the equity, on Thursday through various block deals. The transactions took place on the BSE, with an average price of Rs 170.60 per share.

Morgan Stanley's acquisition amounted to shares worth Rs 576 crore, constituting 38.3 per cent of the total block, while Axis and Religare acquired 3.9 million shares each, spending Rs 67 crore.

Larsen & Toubro (L&T), the holding company, also participated in the trade by purchasing an additional 0.50 per cent of shares.

L&T acquired 1.25 crore shares of L&T Finance for Rs 213 crore. Following this acquisition, L&T's ownership in the company will increase by 0.50 per cent to 66.4 per cent.

Other buyers in the transaction include DSP Blackrock, Goldman Sachs (Singapore), Axis MF, and Religare MF.

On Thursday, L&T finance also announced the investment agreement  between BC Asia Growth Investments, BC Investments VI Limited and the Company in relation to the acquisition of shares stands terminated. And consequently Pavninder Singh ceases to be a Director on the Board of the company effective today, the company said in an exchange filing. 

L&T Finance consolidated net profit rose by 11 per cent year-on-year (YoY) to Rs 554 crore in the quarter ended March 2024 (Q4FY24), on the back of healthy net interest margins (NIMs) and fees. It had posted a net profit of Rs 501 crore in Q4FY23.

Sequentially, the net profit declined from Rs 640 crore in the third quarter ended December 2023 due to one-time prudential provision of Rs 175 crore for Securities Receipts (SR) portfolio in Q4FY24.

As for the full financial year FY24, net profit rose by 43 per cent to Rs 2,320 crore as against Rs 1,623 crore in FY24.

At 10:52 AM; the stock of the company was trading 3.95 per cent higher at Rs 182.80, as compared to 0.15 per cent rise in the BSE Sensex.