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L&T Finance says to raise $280 mn in IPO

L&T Finance says to raise $280 mn in IPO

Mumbai: L&T Finance Holdings said on Thursday it would raise 1,245 crore ($280 million) in an initial public offering to be launched next week, marking one of the few share sales this year as Indian firms defer plans amid a weak market.

The company, a unit of Indian engineering conglomerate Larsen & Toubro , has set a price band of 51 to 59 a share for the offering, its chairman Y. M. Deosthalee told reporters on Thursday.

Earlier this month, L&T Finance had raised 330 crore ($75 million) in a pre-IPO share placement to US private-equity fund Capital International, which will take its total raising to 1,575 crore.

Indian companies have raised $7.1 billion in equity in the first half of 2011, down 42% from the year-ago period, Thomson Reuters data showed.

India’s main stock index in Mumbai is down nearly 10% this year, making it one of the world’s worst-performing markets.

Several companies have delayed share sale plans, including Oil and Natural Gas Corp , which has been deferring a $2.8 billion offering and Steel Authority of India , which has delayed a $1.8 billion issue.

Offer Launch Next Week

L&T Finance’s IPO will launch on 27 July and close on 29 July. It will open for anchor investors a day earlier, the company said.

Shares in the company are likely to be listed on 12 Aug., a source with knowledge of the matter said.

L&T Finance Holdings is the holding company for the financial services business of the group and operates through four units that manage the mutual fund, asset financing, infrastructure financing and working capital funding businesses.

It reported net profit of 390 crore for the fiscal year ended March 2011, on revenue of 2,090 crore. The proceeds of the issue will be used to strengthen its capital base, for lending and for repayment of debt.

HSBC , Citigroup , JM Financial , Barclays Capital , Credit Suisse and Equirus Capital are the arrangers to the L&T Finance offer.

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