Mumbai: Indian industrial group Larsen and Toubro Ltd (L&T) is looking to sell some assets including roads and infrastructure projects and dilute its stake in non-core subsidiaries to revive performance, the group’s executive chairman said on Wednesday.

A.M. Naik said L&T, a sprawling $21 billion group, remained far too complex and needed to improve its return on equity by exiting some infrastructure businesses and selling minority stakes in operations no longer as essential to the company.

“I am trying to reduce the smaller businesses and sell them. If I can do something about heavy asset companies, some of it we could exit or sell, our return on equity will improve," he told Reuters in an interview in Mumbai.

L&T, which makes anything from metro trains to submarines to parts for nuclear reactors, will also appoint individual unit chief executives and individual boards to encourage independence and boost returns among its more than 70 businesses, Naik said.

Under Naik, L&T has been selling stakes in some of its subsidiaries over the last 18 months and looked at listing others on the stock exchange.

Bain Capital has agreed to buy a 10% stake in L&T Finance Holdings, its financial services arm. Last year, L&T agreed to sell a chunk of L&T Infrastructure Development Projects Ltd to a Canadian pension fund.

Naik said that process would be extended as the company worked with consultants on a five-year plan to simplify the group and hand greater independence to individual units.

“It has become very complex and I have reduced a little bit. A lot more needs to be done," he said.

L&T has disappointed investors in recent quarters with worse-than-expected revenue growth, in part because of a slowdown among Middle Eastern oil and gas clients and continued weakness in India where new orders remain slow. Reuters

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