L&T will not raise any money in this fiscal as it has over Rs 7,600 crore cash and cash equivalent on its books.
Mr Y.M. Deosthalee, Chief Financial Officer, L&T, said the cash had been raised last year in anticipation of some contracts which did not come by and hence, was available for deployment this year. “We have enough cash to fund all projects and investments in subsidiaries this fiscal,” he said.
The capital expenditure for the current year would be around Rs 2,000 crore and investments in subsidiaries and equity infusion to the Hyderabad metro project would be more than covered. In all, L&T needed about Rs 3,500 crore.
TOTAL DEBT
On cost of borrowings, he said most were in foreign currency and were well hedged. The average cost would be around 6.5-7 per cent. He cautioned that any further rise in domestic interest rate and inflation could lead to increase in the cost of hedging as the forward premium would go up.
The total debt of the L&T Group was in the range of Rs 30,000 crore and L&T as a standalone company Rs 7,000 crore. The difference of Rs 23,000 crore was primarily project finance obtained by special purpose vehicles formed for specific projects such as infrastructure and had no recourse to the parent company.
Mr Deosthalee pointed out for all infrastructure projects, special purpose vehicles had to be formed as the concession agreement was for the project alone and lenders too were different. L&T has over 115 to 120 such SPVs that were formed for the sole purpose of executing infrastructure projects.
CAPACITY ADDITION
L&T had invested Rs 1,673 crore last year on capital expenditure programmes.
To strengthen its position as a major player in the EPC (engineering, procurement and construction) in hydrocarbon upstream sector, it had commissioned a modular fabrication yard at Kattupalli, near Ennore, Tamil Nadu. It had also commissioned integrated facilities for making super critical boilers and turbine generators at Hazira, Gujarat, in the last fiscal.