Mumbai: Engineering and construction company Larsen and Toubro (L&T) on Friday raised ₹ 372.75 crore through sale of shares in its information technology (IT) services unit ahead of the ₹ 1,233 crore initial public offering (IPO) next week, the company said in a stock exchange filing.
The public issue will open on 11 July and close on 13 July.
On Friday, L&T sold 5.25 million L&T Infotech shares to 22 institutional investors at ₹ 710 per share, the upper end of the ₹ 705-710 price band for the IPO.
Auburn Ltd, the public market investment arm of home-grown private equity fund ChrysCapital Investment Advisors India Pvt. Ltd, bought shares worth ₹ 160 crore, nearly 43% of the total anchor book.
Other investors who acquired L&T Infotech shares in the anchor allotment include FIL Investments (Mauritius) Ltd, HDFC Trustee Co. Ltd, Prudential ICICI Technology Fund, The New India Assurance Co. Ltd, Reliance Capital Trustee Co. Ltd, Birla Sun Life Trustee Co. Pvt. Ltd, Max Life Insurance Co. Ltd and NTAsian Emerging Leaders Fund.
The anchor book is that portion of the IPO that bankers allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.
L&T Infotech had initially filed its draft share sale prospectus in September 2015. It refiled the prospectus in April. It is offering a discount of ₹ 10 per share for retail investors.
Parent firm L&T is looking to divest about a 10% stake in the firm through the offer-for-sale (OFS) route. It will get three years from the date of listing to lower its stake to 75% to comply with the Securities and Exchange Board of India (Sebi) norms on minimum public shareholding.
Earlier this week, the management told reporters it may use the share sale proceeds for working capital requirements or for future acquisitions.
L&T Infotech is structured around two businesses—the industrials and services clusters. The industrials cluster caters to clients in sectors such as manufacturing, energy and utilities, hi-tech and consumer electronics, automotive and aerospace, engineering and construction.
The services cluster focuses on banking, financial services, insurance, travel and logistics, media and entertainment, and healthcare.
L&T Infotech is the sixth largest Indian IT services firm in terms of export revenue, with 258 active clients.
Earlier this week, non-executive chairman A.M. Naik said the firm is aiming to double its revenue and profit in four years.
It posted a revenue of $887 million ( ₹ 5,847.1 crore) in the year ended March 2016. Its profit for FY16 grew 15.1% from a year ago to ₹ 922.3 crore, according to the company’s presentation.
In August 2015, parent L&T named former Infosys veteran Sanjay Jalona as managing director and chief executive of L&T Infotech. Citigroup Global Markets India Pvt. Ltd, Kotak Mahindra Capital Co. Ltd and ICICI Securities Ltd are financial advisers to the sale.
So far this year, 13 firms have raised a little more than ₹ 8,500 crore through the IPO route, according to data from primary market tracker Prime Database.
In 2015, 21 companies had raised ₹ 13,614 crore through initial share sales, data shows.