MUMBAI: Infrastructure giant Larsen and Toubro on Saturday confirmed reports that it would set up an infrastructure investment trust (InvIT), with subsidiary L&T IDPL proposing to set one up in the name of IndInfravit Trust.
“Our subsidiary company L&T IDPL (L&T Infrastructure Development Projects Ltd) proposes to establish an infrastructure investment trust in the name of IndInfravit Trust under the provisions of the InvIT Regulations,” the engineering conglomerate said in a BSE filing. An application for registration of the InvIT as an infrastructure investment trust was filed by L&T IDPL with Securities and Exchange Board of India (SEBI) yesterday, it added.
Larsen & Toubro is an Indian multinational engaged in technology, engineering, construction, manufacturing and financial services with $17 billion in revenue, operating in over 30 countries worldwide. Earlier, reports had said that the firm would set up an InvIT to raise capital through L&T IDPL, which is also backed by Canadian pension fund Canada Pension Plan Investment Board (CPPIB). The target for capital raised through the InvIT is reportedly Rs 3,000 crore, to be privately placed with investors.
Sources also said that the company has hired ICICI Securities and Citi Bank to run the process, which was expected to be completed by September. If it goes as planned, L&T IDPL will be the third infrastructure company to raise capital through an InvIT. So far however, analysts say that InvIts have not attracted much interest among domestic investors. The move comes in the wake of capital shortages at most infrastructure firms, with urgent need to deleverage balance sheets. L&T IDPL had hired Kotak Investment Bank four months earlier to sell four of its road assets, but the offer did not find any suitors.