L&T sold its ready mix concrete business, L&T Concrete, to Lafarge SA, the world's second largest cement maker as a part of its plan to exit from non-core businesses.
Y M Deosthalee, chief financial officer, L&T, said, "We will be using the sum for our ongoing expansion and new projects, which include ship building, and power and offshore facilities."
A quarter of the proceeds will come in a week and the remaining will follow in the next three months, Deosthalee said.
The construction giant sold its cement business to the Aditya Birla group in 2001 but retained its ready mix concrete business.
When asked that despite the concrete business being profitable, the company sold it off, he said: "Profitability cannot always be the factor for not selling a business. We are into the project business and did not want to be in the commodity business."
The Mumbai-based company has two power joint ventures and is developing heavy electrical facilities in Oman. The company will also invest in its project business, which includes roads, ports and bridges across the country.
The proceeds from the sale of L&T Concrete constitute less than 10 per cent of its net sales.
L&T's project costs are far higher than these proceeds.
"We have to raise the funds from other sources, plus we have some surplus funds, too. We will keep raising debt from time to time for our projects," added Deosthalee.
L&T Concrete has a network of 66 ready mix plants with a combined capacity of 4.1 million cubic meters per annum. A majority of these plants are based in the urban metro regions of the country.
On the Bombay Stock Exchange, the company's stock prices closed at Rs 2,962.50, up 4.67 per cent today.
