Moneycontrol Bureau
L&T Technology Services, the subsidiary of engineering & construction major Larsen & Toubro, has fixed a price band for its 1.04 crore shares public issue at Rs 850-860 per share.
The offer by engineering research and development (ER&D) services company will be opened for subscription on September 12 and will close on September 15.
L&T informed exchanges yesterday that the red herring prospectus filed by the subsidiary company with the Registrar of Companies, Maharashtra, Mumbai, has been approved on September 1.
This is an offer for sale issue by its parent company Larsen & Toubro, which will dilute 10 percent shareholding and receive Rs 894.4 crore at Rs 860 per share. Currently L&T holds 100 percent stake in the company.
"Listing will enhance brand name and provide liquidity to the existing shareholders. Our company will not receive any proceeds from the offer," the company said.
This is the second public issue from L&T Group during the quarter. Larsen & Toubro Infotech, the software solutions provider, raised more than Rs 1,200 crore through the issue in July.
L&T Technology provides ER&D services to manufacturing, technology and process engineering companies. It operates in five industry segments - transportation, industrial products, telecom & hi-tech, process industry and medical devices.
"50.3 percent of revenue in FY16 was derived from the three segments of industrial products, process industry and medical devices," the company said in its DRHP filed in July.
It derives 80.2 percent of revenues from customers in North America and Europe, which are the two largest regions of corporate ER&D spend and represented over 73 perent of the USD 1,007 billion corporate ER&D services spend in 2015 (according to Zinnov Report).
Its profit in FY16 surged 34 percent to Rs 416.6 crore and revenue grew by 18.9 percent to Rs 3,142.7 crore compared to previous financial year. Operating profit shot up 40.7 percent to Rs 596.65 crore and margin expanded by 298 basis points to 18.98 percent in same period.
Equity shares are proposed to be listed on the BSE and the NSE.
Kotak Mahindra Capital Company, DSP Merrill Lynch, JM Financial Institutional Securities and SBI Capital Markets are book running lead managers to the issue while Karvy Computershare is the registrar.Posted by Sunil Shankar Matkar
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