L&T Finance not looking at equity listing for now

L&T Finance Ltd (LTF), a non-banking finance company, is not looking at a listing of its equity shares for now, its Chairman, Mr Y.M. Deosthalee, has said.

The company may go in for a series of non-convertible debenture (NCD) issuances in the coming months after it establishes and creates liquidity in the proposed NCD instrument slated to hit the market in mid-August. Promoted by engineering major Larsen & Toubro in 1994, LTF is a wholly-owned subsidiary of L&T Capital Holdings Ltd (a subsidiary company of L&T).

Two days ago, LTF announced that it proposes to raise at least Rs 500 crore through NCDs, which are to be listed on the National Stock Exchange (NSE).

“This (NCD) is one option we want to make sure is available to us and use it from time to time after creating liquidity in existing NCD instrument through listing. We do understand that investors see a good opportunity in our equity story. But we are not ready (for listing) as yet. We have some homework to do,” Mr Deosthalee said here on Thursday. He was responding to a question on whether LTF intends to list its shares in the coming days. Mr Deosthalee said there were other options for price discovery that could always be explored by LTF.

Although the coupon rate for the proposed NCD instrument was yet to be finalised, Mr Deosthalee indicated that the rate will be higher than the yield of the 10-year G-sec paper. He also said that the NCD will have tenures of 5, 7, or 10 years.

“Our intent is to come up with a long-term instrument for the debt market. Through the NCDs we are also creating additional source of funding for the company. The idea is to make L&T finance a household name. We are also creating a market for NBFCs for retail funding,” he said.

Mr Deosthalee also said that LTF’s decision to come up with an NCD issue did not mean that the company would stop borrowing from banks and mutual funds.

On the possibility of merger with L&T Infrastructure Finance, he said that L&T Finance was not averse to any such move, but added that no decision has been taken on this front.

Asked about interest rates, Mr Deosthalee said that interest rates would remain stable for next few months. “After November or December, there is every likelihood of it going up. Now there is ample liquidity and credit needs of corporates have not gone up. I don’t think interest rates will come down in the near future.”

Source: thehindubusinessline.com