L&T to raise ₹2,000 cr from IT unit

Construction and engineering conglomerate Larsen & Toubro is planning to raise about ₹1,500-2,000 crore through an initial public offering of its IT arm L&T Infotech.

L&T intends to file a draft red herring prospectus (DRHP), or the initial papers, for an IPO of its IT unit by late August or early September. The conglomerate intends to list L&T Infotech by December, a top official told BusinessLine .

Proceeds of stake The official said up to 15 per cent stake will be offloaded through the IPO, and the proceeds ploughed back to L&T. He, however, declined to be identified before a formal announcement was made by the company. A company spokesperson too declined to comment.

Later, L&T’s board, which met on Friday, approved sale of 15 per cent stake through an offer for sale. However, the company did not disclose any details, other than its approval for the quantum of stake to be offloaded.

Meanwhile, L&T has appointed Citibank, Barclays and Kotak Bank as advisors for the IPO.

With market conditions improving, companies are looking at IPO as a mode of raising funds. Since January, more than ₹4,000 crore has been raised by about nine companies through the IPO route.

In June, multiple sources told BusinessLine that L&T was hoping to raise $1-1.5 billion by selling stake in three units, as part of its strategy to exit non-core areas. They had also said that the infrastructure major was looking to offload at least 10 per cent stake or float an IPO.