L & T To Set Up Capital Market Services Arm

Larsen & Toubro (L&T) would float a separate company to focus on capital market business opportunities, the company said in a press release yesterday. The new venture will be incorporated as a subsidiary of L&T Finance Ltd, a wholly owned arm of the company. The proposal is in line with the recommendations of the Boston Consulting Group (BCG), appointed to advise L&T on its restructuring.

The new company would pursue a wide range of activities as a capital market intermediary, the release said. While presenting the BCG report, L&T chief executive officer-cum-managing director had indicated of setting up a full-fledged merchant banking arm to handle the divestment of non-core areas.

The new company's thrust areas will include structuring of financial instruments and sourcing capital (both debt and equity) through initial public offerings, rights offerings and private placements. Besides, it would offer other forms of financial advisory and syndication services. Currently, the structured finance division of L&T Finance, a participant in the private placement segment of the capital market, caters to the financial requirements of corporates, public sector enterprises and state undertakings.