L&T to tap sovereign funds, seeks stake sale for expansion

Larsen & Toubro Ltd , India's biggest engineering conglomerate, is seeking to sell a stake in its infrastructure unit to help fund its expansion as economic growth drives demand for roads, ports and bridges.

The company is looking to sell a share in L&T Infrastructure Development Projects Ltd to share risk, Group Chief Financial Officer R. Shankar Raman said on Monday, declining to specify the size of the stake.

[caption id="attachment_355756" align="alignleft" width="380" caption="The group is seeking to offload a minority stake in its infrastructure arm to private equity investors . AFP"][/caption]

The group is seeking to offload a minority stake in its infrastructure arm to private equity investors or pension funds for as much as $500 million, the Business Standard reported, citing people familiar with the matter.

Larsen & Toubro, which has mandated Morgan Stanley to arrange the sale, is also eyeing to tap sovereign funds such as Singapore's Temasek , according to the newspaper.

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L&T Infrastructure Development Projects is currently handling projects worth Rs 450 billion, including 19 road and three port developments. Its largest contract is a Rs 164 billion metro rail project in southern Hyderabad city.

Poor infrastructure acts as a bottleneck to India's economic growth that slowed to 5.3 percent in the quarter ended March, the weakest pace in nine years.

Reuters