L&T Finance IPO opens on 27th July

July 21, 2011   ·   0 Comments

L&T Finance plans to raise Rs 1,575 cr from IPO

L&T Finance Holdings Ltd plans to raise Rs 1,575 crore via initial public offering (IPO) that will open on July 27 in a largest listing in India so far this year. Indian markets are however still trying to find a grip on various global events which have made markets directionless. However upcoming Reserve Bank of India’s policy meet next week on July 26 might provide some direction and we might be able to move out of this range.

www.stockssavvy.comThe offer will be open for anchor investors on July 26, while it will open for retail bids the next day. L&T Finance Holdings Ltd, a unit of Indian engineering conglomerate Larsen & Toubro earlier this month raised Rs 3.3 billion through a share placement to U.S. private-equity fund, Capital International at Rs 55 per share.

L&T Finance Holdings plans to use the funds from the issue to repay an inter-corporate deposit to its promoter group for Rs 345 crore. It also plans to pump Rs 570 crore in L&T Finance and Rs 535 crore in L&T Infrastructure Finance Company Ltd. L&T Finance Holding Ltd offers a diverse range of financial products and services across the corporate, retail and infrastructure finance sectors, as well as mutual fund products and investment management services, through our direct and indirect wholly-owned subsidiaries.

The company has a diversified loan book, strong distribution network, experienced management team, strong backing of brand name and being a front-runner for banking licence might make L&T Finance Holdings an attractive bet. “L&T Finance and L&T Infra Finance Company are both non-banking finance company and are regulated by Reserve Bank of India”, says Deosthalee.

L&T Finance is an asset finance company classified as an asset finance company while L&T Infra Finance is a specialized infrastructure finance company and very recently it has received the Public Financial Institution (PFI) status from the Government of India. The group may list 2 NBFCs under holding company later, adds Deosthalee.

Thirteen IPOs that were listed on the bourses since April this year and majority of the listings were along the issue price. Some of them saw a significant rise on the listing day, but could not retain the high levels amid recent volatility and growing uncertainty on international front.

Finance companies in particular were under pressure recently on back of aggressive monetary tightening by the Reserve Bank of India, which resulted in hardening of interest rates by banks, rising inflation and moderating economic growth have all contributed to slump in demand.M Financial Consultants, Citigroup Global Markets and HSBC Securities are the joint global co-ordinators and the book-running lead managers (BRLM) to the issue. Credit Suisse Securities and Barclays Securities are the BRLMs while Equirus Capital is the co-BRLM.

Grey Market Premium (Dt. 21-7-2011)

Company Name Offer Price

(Rs.)

Premium

(Rs.)

Kostak

(Rs. 1 Lac

Application)

Kostak

(Rs. 2 Lac

Application)

Vaswani Ind. 49 2 to 2.50
Bharatiya Global 75 to 82 1.50 to 2
ONGC (FPO) Deal Cancel
Inventure Growth 100 to 117 2 to 3 2300 to 2400
L & T Finance 2.50 to 3 2500 to 2600

Stay tuned for detailed analysis of the Stock.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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