Bangalore: India’s top engineering and construction firm, Larsen & Toubro Ltd. (L&T), said on Thursday it will launch a $1 billion infrastructure fund in one to two months.
“Various institutions around the world will invest in that fund...L&T will invest $50 million in that. The fund will work independently to promote various infrastructure projects in India,” Chairman A.M. Naik told reporters.
Naik also said that L&T will form 3 wholly-owned units for power, shipbuilding and railways to tap growing business potential as Asia’s third-largest economy steps up investment on infrastructure projects to boost growth.
“We are creating these separate companies so that we can attract the best talent to be the CEOs...It will take more than 5 years before these companies mature for an independent existence without L&T’s support.”
In the power business, Nayak said L&T had tied up with Japan’s Mitsubishi Heavy Industries to make super-critical boilers in India. It will soon form a joint venture with a leading turbine manufacturers, he said.
Analysts say companies such as L&T and state-run power equipment maker Bharat Heavy Electricals Ltd. are expected to benefit from a slew of big power projects planned by India to overcome shortages in electricity.
India plans to add 78,577 megawatts of power generation capacity by 2012, mainly from coal-fired units.
Shares in the company ended 1.7% higher at a record close of Rs 2,331.15 , after rising to a life high of Rs 2,364 during trade, in a Mumbai market.