Mumbai: L&T Finance Holdings has announced a price band of Rs 51-Rs 59 for its IPO-- the first from L&T group since 1950-- which will hit the market on July 27 to raise Rs 1,245 crore.
"The issue opening on July 27 and closing on 29 will see L&T Finance Holdings diluting between 15 and 17 percent of its equity shareholding and will be priced in the range of Rs 51 to 59 per share," L&T Finance Holdings chairman and group chief financial officer Y M Deosthalee told reporters here.
Deosthalee said at least 50 percent of the net issue will be allocated to qualified institutional buyers out of which up to 30 percent may be reserved for anchor investors. Out of this 30 percent, one-third may be reserved for the domestic mutual funds too, he added.
The company is expecting to mop up Rs 161 crore from the anchor investors.
L&T Fin Holdings has reserved shares worth Rs 50 crore for the employees out of the 12,450 million shares on offer, and worth Rs 120 crore for the L&T shareholders, Deosthalee said.
He added that there was also a reserved portion for the L&T Group employees and existing L&T shareholders, both of whom would get a Rs 2 discount to the issue price.
The anchor investor portion will be open on July 26, the company said.
Most of the proceeds from the IPO will be pumped into its five subsidiaries-- L&T Infrastructure Company, L&T Finance, India Infrastructure Developers, L&T Investment Management and L&T Mutual Fund Trustees.
N Sivaraman, President of L&T Fiance Holding and whole time director of L&T Group, said the company would allocate around Rs 550 crore each to L&T Infrastructure Company and L&T Finance, while the rest of the money would be given to other arms to boost their growth.
Citing three reasons for hitting the capital market which is in a depressed mode now, Deosthalee said the first and foremost reason was the fact all the five arms of L&T Finance Holdings needed capital as they were witnessing rapid growth.
"These companies on an average were logging in 25 percent annual growth for the past many years," Deosthalee said.
"We are also happy to inform the L&T shareholders that this is the first issue from the house of L&T since we went public way back in 1950," Deosthalee said.
He added the IPO was being launched to unlock value for the shareholders of the parent L&T company, besides not burdening the parent for funds.
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