Mumbai: The financial services unit of Larsen and Toubro Ltd, or L&T, has raised its stake in Kalindee Rail Nirman (Engineers) Ltd to 14.76% by buying more shares in the company, including from the stock market, according to two people familiar with the development.

L&T Capital Co. Ltd had last month bought 5% of Kalindee, which makes signalling equipment, lays telecommunication networks and executes railway gauge conversion projects for Indian Railways, from the market. It purchased an additional 9.76% this month from the market, and from US-based Och-Ziss Fund and Chennai-based Sundaram Finance Ltd, one person familiar with the transaction said on condition of anonymity.

This person said L&T Capital bought 1.4 million shares from Oxus and Sundaram, but Mint could not independently confirm this with the two firms.

At an average price of Rs113 a share, L&T would have paid Rs16.41 crore to buy 14.76% of Kalindee from the open market.

R. Shankar Raman, the executive vice-president (finance) of L&T, confirmed to Mint that L&T Capital had bought a stake of less than 15% in the New Delhi-based company and has no plan to make an open offer.

Shifting tracks: A railway track in New Delhi. L&T intends to bid for railway contracts, including for a railway freight corridor project. Ramesh Pathania / Mint

“It is a strategic stake below 15% with our intent to enter into railway business," the L&T executive said.

L&T intends to bid for contracts, including those related to a dedicated railway freight corridor project, metro and mono rail projects, and make railway wagons, he said. L&T had last week bid for a mono rail project in Mumbai.

R.D. Sharma, chairman and managing director of Kalindee, said he is aware of the development, though not clear about the size of the stake held by L&T.

Shares of Kalindee rose 5.3% on the Bombay Stock Exchange to close at Rs141.10 on Wednesday. On Tuesday, the stock had surged 19.96% to close at Rs134.