L&T roping in investor for infra arm, says Naik

New capital would be brought in by unlocking the value of L&T IDPL

Construction major Larsen & Toubro (L&T) on Friday said it would bring in an investor into L&T Infrastructure Development Projects Limited, or L&T IDPL, its infrastructure development arm, in a month or two.

At the company’s annual general meeting on Friday, L&T Chairman A M Naik said new capital would be brought in by unlocking the value of L&T IDPL. He, however, did not give any detail on the extent of the equity to be diluted and the funds that would be raised through the sale.

A few years earlier, L&T had planned an initial public offering for L&T IDPL. Naik said the plan did not materialise due to unfavourable market conditions.

 

L&T also plans to sell equity in its port project Dhamra in Odisha. L&T said it expected five or six tenders for power equipment in the next few months. “One of these tenders is in from the private sector,” said Naik.

Import of power equipment from China has dampened prospects of domestic power equipment manufacturers. Naik expects this trend to change, as more players opt for indigenous manufacturing, instead of cheaper Chinese imports. “Chinese equipment has been giving trouble, and the mindsets (of power developers) are shifting towards better quality. With the rupee’s devaluation and costs going down…hoping Chinese imports go down,” said Naik.

L&T also plans to increase the turnover from infrastructure projects in West Asia from $1.5 billion (Rs 8,295 crore) to $2 billion (Rs 11,060 crore) this year. International projects would provide a cushion effect in tiding over the slowdown in construction contracts being awarded in the country.

In addition to the 15 priority infrastructure projects stated by Prime Minister Manmohan Singh, Naik also rooted for the Sewri Nhava Sheva trans-harbour link in Mumbai. “The government and the opposition should work together in these challenging times. A lot of unnecessary things are happening, which are not necessarily productive,” he said.