L&T divests its entire stake of 51% in L&T Infrastructure Development Projects

The engineering major Larsen & Toubro has divested its entire stake of 51% in L&T Infrastructure Development Projects Limited (L&T IDPL) and its subsidiaries to a portfolio company of Infrastructure Yield Plus II, which is managed by Edelweiss Alternatives, the company said in a regulatory filing on Monday. The divestment is in line with the company’s strategy of reducing its exposure to the non-core asset-heavy developmental projects portfolio. 

L&T IDPL is a joint venture between Larsen & Toubro Limited and Canada Pension Plan Investment Board (CPP Investments) holding 51% and 49% shares, respectively. “The transaction is subject to completion of customary closing conditions including receipt of applicable regulatory and other approvals. Gross proceeds to L&T and CPP investments from the sale would be approximately ₹ 27,234 million before closing adjustments and other terms of the transaction,” the company said in a statement. 

As per the regulatory filing, in FY 2020-21, L&T IDPL’s consolidated revenue was ₹128 crore which constitutes around 0.08% of the consolidated revenue of L&T for FY2021-22. The company has a net worth of ₹2,521 crore as on March 31, 2022. Ahmedabad-Maliya Tollway Limited, L&T Deccan Tollways Limited, L&T Interstate Road Corridor Limited, L&T Rajkot-Vadinar Tollway Limited, L&T Samakhiali Gandhidham Tollway Limited, L&T Sambalpur Rourkela Tollway Limited, L&T Transportation Infrastructure Limited, Panipat Elevated Corridor Limited, PNG Tollway Limited, Vadodara Bharuch Tollway Limited, L&T IDPL Indvit Services Limited, and Kudgi Transmission Limited are the subsidiaries of L&T IDPL. 

D K Sen, whole-time director and senior executive vice president (developmental projects) at Larsen & Toubro said, “This development is a significant step towards the execution of our strategic Lakshya 2026 plan and houses L&T IDPL with Edelweiss Alternatives, an established and reputed alternatives platform with a better strategic fit. The transaction is a win-win for both L&T and Edelweiss. It will release growth capital for the L&T Group. Also, it will provide Edelweiss Alternatives with access to a good quality portfolio of assets.”

The company is also planning to sell Nabha Power Project in Punjab as well as its entire stake in Hyderabad metro projects by FY23 in a phased manner, according to reports. The company has a 90% stake in Hyderabad metro project and plans to divest 51% in the first phase. 

Following this development, the shares of Larsen & Toubro slumped 0.30% at ₹2,167. On Monday, the share price of Larsen & Toubro opened in line with the closing price of the previous session at ₹2,173.80. It hit an intra-day high of ₹2,176. In the past three months, the company’s stocks have surged 13.53%. The company’s market capitalization stood at ₹3.04 lakh crore with as many as 21,021 shares changing hands on the Bombay Stock Exchange as against two weeks average of 0.77 lakhs. The company hit a 52-week high of ₹2,210 on December 16 this year, and a 52-week low of ₹1,456 on June 20 this year.