L&T rose 0.48% to Rs 1654.70 at 9:47 IST on BSE after the firm said it has entered into a definitive pact with a wholly-owned unit of Canada Pension Plan Investment Board for an initial investment tranche of Rs 1000 crore into L&T's unit L&T IDPL.
The announcement was made during market hours today, 23 June 2014.
Meanwhile the S&P BSE Sensex was up 54.95 points or 0.22% at 25,160.46.
On BSE, so far 17,000 shares were traded in the counter as against average daily volume of 1.86 lakh shares in the past two weeks.
The stock hit a high of Rs 1,662.05 and a low of Rs 1,650.05 so far during the day.
L&T said it has entered into a definitive investment agreement with a wholly-owned subsidiary of Canada Pension Plan Investment Board (CPPIB), CPP Investment Board Singaporean Holdings 1 (CPPIBSH), for an initial investment tranche of Rs 1000 crore, to be invested by CPPIBSH into the company's subsidiary L&T Infrastructure Development Projects (L&T IDPL).
This will be followed by a second tranche of Rs 1000 crore, or such higher amount as may be agreed between the company and CPPIBSH, after twelve months from the date of the initial investment subject to any required regulatory approvals at such time, L&T said. CPPIBSH will invest in preference shares of L&T IDPL, compulsorily convertible into equity shares by 2018 at a valuation to be determined as per a mutually agreed process. Post conversion, CPPIBSH will hold a minority stake in the equity capital of L&T IDPL, L&T said in a statement.
L&T said that this would be the first direct private investment by a Canadian pension fund into an Indian infrastructure development company. Mr. R Shankar Raman, Chief Financial Officer and Member of the Board, L&T, said, "We are pleased to form this new partnership with CPPIB. With its long term view, CPPIB would be an ideal partner for L&T and will provide growth capital to L&T IDPL to expand its infrastructure development business."
According to Mr. Andre Bourbonnais, Senior Vice-President, Private Investments, CPPIB, "This transaction represents CPPIB's first investment in India's infrastructure sector with a highly reputable partner and fits well with our strategy for India as a key long-term growth market. We look forward to partnering with L&T and L&T IDPL's experienced management teams as we build our infrastructure platform in India over the long term."
The completion of the transaction and receipt of funds is subject to fulfillment of customary closing conditions for transactions of this nature and procuring necessary approvals from relevant government authorities and regulators, L&T said in a statement.
L&T IDPL is a subsidiary of L&T. The company has business interests in the development of roads and bridges, ports, metro rail, power transmission lines, wind energy and emerging sectors such as water and railways and handles a portfolio of infrastructure assets with estimated project cost of $7.5 billion comprising of 23 projects across sectors.
L&T's net profit surged 52.3% to Rs 2723.48 crore on 11.1% growth in net sales to Rs 20079.10 crore in Q4 March 2014 over Q4 March 2013.
L&T is a $14.3 billion technology, engineering, construction, manufacturing and financial services conglomerate, with global operations.
Powered by Capital Market - Live News
