MUMBAI –L&T Finance Holdings Ltd. will launch its initial public offering on July 27 in the largest listing in India so far this year and a key test for investor appetite for a big-ticket share sale in a moribund market.
The share sale is also an important part of Indian engineering giant Larsen & Toubro Ltd.'s plan to spin off some of its non-core businesses into self-sustaining units with independent access to capital markets.
The float, which will raise up to 12.45 billion ($280.4 million), will be in addition to an institutional share placement of 3.30 billion rupees in early July, taking the total funds raised through the exercise to as much as 15.75 billion rupees. That's a little less than the up to 17.50 billion rupees the company had indicated in its draft offer document earlier in the year, as it scaled down its plan due to weak demand in primary markets.
The non-bank lender may accept bids from cornerstone investors a day before the launch of the issue, which runs until July 29, it said in the offer document.
L&T Finance had filed a draft prospectus in September 2010 but delayed its IPO beyond the initial targeted launch of March 2011 as volatile local stock markets soured investor appetite.
The issue, just the third listing in India beyond $100 million in size this year, will be a key barometer of demand in what has so far been a weak IPO market. Dealogic data shows a 52% fall in primary equity deal volumes so far this year.
Finance companies in particular were under pressure as aggressive monetary tightening by India's central bank coupled with moderating economic growth have weighed on investor demand.
However, even another hike at the central bank's rate-setting meeting on July 26, a day before the issue's launch, is unlikely to deter investors from buying into the shares, said S. Tulsian, a broker at the Bombay Stock Exchange. Tulsian added that parent Larsen & Toubro's past performance could encourage retail investors to buy into the latest offering by the group.
JM Financial Consultants Pvt., Citigroup Global Markets India Pvt., HSBC Securities and Capital Markets India Pvt. Barclays Securities (India) Pvt., Credit Suisse Securities (India) Pvt., and Equirus Capital Pvt. are managing the issue.
The non-bank lender may accept bids from cornerstone investors a day before the issue opens, it said in the offer document. The offer will close on July 29. L&T Finance has already raised 3.3 billion rupees in an institutional share placement ahead of the public offering.
JM Financial Consultants Pvt., Citigroup Global Markets India Pvt., HSBC Securities and Capital Markets India Pvt., Barclays Securities (India) Pvt., Credit Suisse Securities (India) Pvt., and Equirus Capital Pvt. are managing the issue.
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