L&T Infotech, a subsidiary of engineering giant Larsen & Toubro, has received capital markets regulator Securities and Exchange Board of India’s (Sebi) approval to float an initial public offering worth Rs 2,000 crore.
The issue comprises an offer for sale of up to 1,75,00,000 equity shares of face value of Rs 1 each by Larsen & Toubro.
The firm, which had filed draft red herring prospectus (DRHP) with Sebi on September 28 seeking permission for an IPO, obtained clearance from capital markets regulator on December 31.
Last month, a company official had said that L&T Infotech is looking to raise over Rs 2,000 crore through the initial public offer (IPO) and the public issue is expected to hit the capital markets in the last quarter of 2015-16.
The proceeds will be used to fund its future growth plans, the official had said.
“India's biggest engineering and construction company will sell 10 per cent stake in IT services unit as part of its plans to monetise non-core businesses,” L&T chairman AM Naik had said in June last year.
Citigroup Global Markets India, Kotak Mahindra Capital Company, Barclays Bank Plc and ICICI Securities are stated to manage to issue.
Equity shares offered through the issue are proposed to be listed on BSE and NSE.
L&T Infotech will be the second unit of the parent company to go public. Company’s financial arm L&T Finance Holdings Ltd was listed in 2011.
L&T Infotech currently has a headcount of more than 20,000 people and has Chevron Corp., Hitachi Ltd and Lafarge SA as its top clients.
Naik had estimated the software division's profit to go up to Rs 900 crore in FY16 compared to Rs 762 crore of last fiscal year.
BW Reporters
The author is Senior Correspondent with BW Businessworld
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