L&T Finance Holdings of conglomerate Larsen & Toubro is in talks with bulge bracket investors like Bain Capital LLC, CPPIP - Canada Pension Plan Investment Board and secondary portfolio buyer NewQuest Capital Partners, as it is looking to sell off its private equity (PE) portfolio to consolidate business segments. The transaction would majorly be a secondary portfolio selloff, a decision the firm had taken in the month of May. L&T Finance has nearly Rs.1,000-crore exposure in PE and structured infrastructure and real estate businesses.
New Quest is considered as the preferred buyer, but CPPIP and Bain, which have an existing exposure with L&T companies, are also interested candidates. Sources said that L&T expects to conclude the transaction in two months time.
L&T Finance plan to prune several of its units to focus on its hardcore infrastructure and wholesale financing as the firm aims to improve the return on equity.
Dinanath Dubhashi, L&T Finance Holdings MD, said in a conference call on 9th May that the private equity and proprietary finance businesses don’t yield income and paring off them is part of utilising resources for better businesses, which could provide better yield.
Meanwhile, LT Finance share price was trading 0.49 per cent higher at Rs.92.50 on the NSE today. The stock opened at Rs.92.30 from a previous closing of Rs.92.05.
With a review of its key portfolio, LT's financing business will concentrate only on 3 core business segments - wholesale, rural and housing financing. Both Bain Capital and CPPIP are existing investors at various units of L & T. Last year, Bain picked a 10 per cent stake in L&T Finance for about Rs. 1,300 cr while CPPIP had invested Rs.1,000 cr in L&T IDPL, the infrastructure projects development arm of the company, in December 2014.For the support and resistance levels of LT Finance, please visit LT Finance share price history.
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