L&T Finance's IPO Probable in January,2011

December 20, 2010   ·   0 Comments

www.stockssavvy.comThe government has Okayed L&T Finance’s proposal to bring in Rs 641 crores of FDI. This will pave the way for the L&T Finance IPO.

Speaking to CNBC-TV18, YM Deosthalee, CFO of L&T said the company will launch the taking into account the market conditions. “Our goal is to raise about Rs 1,500 crore,” he added.

Below is a verbatim transcript of the interview.

Q: Now that you have the FIPB nod, can we expect the L&T finance IPO and the word is that it is going to hit the markets this January—can you confirm that?

A: We are actually keeping ourselves ready now that we have received this approval and other necessary clearances. We are ready to launch. We will decide the exact timing depending on various issues. First thing is market condition. The second thing is when do we exactly require the capital. Also the overall investor sentiment—all those factors are important and depending on we will take a call. But we are ready to launch—that much I can tell you.

Q: Is the company still looking to dilute more than 10-12% for IPO?

A: We are likely to raise about Rs 1,500 crore and depending on the valuation the percentage dilution will be decided. Our goal is to raise about Rs 1,500 crore

Q: You are also keen on a bank license so is that going to happen before L&T Finance IPO or later?

A: This is very speculative. We do not have any clarity on the guidelines. Second thing is today right now what is happening is only discussion paper was released by RBI and they have invited comments. At this point in time it is completely speculative. We do not know what kind of guidelines are going to come out with and when they will come out and what will be the conditions. We will examine the situation as and when clarity emerges. Today I do not think there is any clarity on this banking license.

Q: But you are still keen on it right?

A: We will examine the situation as and when the guidelines come out because it will all depend on the conditions which the RBI prescribes.

Q: What is L&T Finance total lending book and NIMs looking like?

A: You see L&T Finance and L&T Infra Finance these are two entities. When we are going to the market, we are thinking of going through the holding company route, which will include both these lending entities—the L&T Finance and L&T Infra Finance. Infra Finance is a project finance company and L&T Finance is predominantly equipment and retail financing entity.

As of now, I have a combined book of both these entities is of the order of about Rs 13,000 crore to Rs 14,000 crore. The net interest margins are in the range of about 3 to 4%.

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