Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Home-page / IL&FS to sell 8% stake for $400 million
BackBack

IL&FS to sell 8% stake for $400 million

IL&FS to sell 8% stake for $400 million

Graphic: Yogesh Kumar/MintPremium

Graphic: Yogesh Kumar/Mint

Mumbai: Infrastructure Leasing and Financial Services Ltd (IL&FS), the holding company for IL&FS group’s infrastructure investments, is close to signing a share sale agreement with investors to raise around $400 million (Rs1,892 crore) by selling an 8% stake at Rs1,099 a share, two investment bankers and a senior IL&FS official familiar with the development said.

Some of the shares to be sold will come from employees, who will get more than a 10-fold return on the investment made in 2000.

The non-banking financial company has already sold around 3% of the stake to two of its existing shareholders—state-owned Life Insurance Corp. of India (LIC)/UTI and Japan’s Orix Corp.—and will sell an additional 5% stake to two investors, including US financial services company Bay Capital, through a mix of fresh shares and shares from IL&FS Employees’ Welfare Trust. Tampa, Florida-based Bay Capital did not respond to email queries.

The IL&FS official, who did not want to be named because the deal is yet to be finalized, declined to name the other investor.

Also Read | IL&FS plans stake sale to raise $300 mn

The two investment bankers also declined to be named for the same reason.

According to the broad contours of the deal, the two new investors will also get a stake in IL&FS’ subsidiaries that have interests in waste management and renewable energy.

The new investors will benefit from both the holding company and the operating companies, the IL&FS official said.

Hiroko Maeda, a spokesperson for Orix, declined to comment.

Graphic: Yogesh Kumar/Mint

“Unlike technology companies where employees are given stock options, we sell a portion of the stake in the employee trust to reward employees," the IL&FS official said, adding that most of the funds from the sale of fresh shares will go towards funding infrastructure projects.

Employees bought these shares at Rs100 each in early 2000, and some sold part of their holding in 2007 at Rs275.

“The infrastructure sector in India is now moving into a stage where investors are looking beyond power to urban infrastructure, and transmission and distribution, and the government is looking to investors to fund this infrastructure build," said Saurabh Mukherjea, head of equities at investment bank Execution Noble.

Mint had reported on 19 April that IL&FS was planning to raise money through sale of fresh shares as well as the welfare trust’s existing equity.

IL&FS has not had a public or rights issue in the last three years, according to a prospectus filed by IL&FS Transportation Networks (India) Ltd, which raised around Rs700 crore from a public issue in March.

LIC, which owns a 25.69% stake, and Orix, which has 22.68%, are the main shareholders in IL&FS. Housing Development Finance Corp. Ltd and Abu Dhabi Investment Authority own 12.48% and 12.12% of IL&FS, respectively.

baiju.k@livemint.com

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 21 Jul 2010, 11:09 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App