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L&T Finance Holdings in talks with Bain, others to sell PE portfolio

28 September, 2016

L&T Finance Holdings Ltd is in talks with several bulge-bracket investors such as Bain Capital LLC, Canada Pension Plan Investment Board (CPPIB) and emerging market-focused PE firm NewQuest Capital Partners to sell its private equity portfolio, according to a report.

The move by the financial services subsidiary of business conglomerate Larsen and Toubro Ltd (L&T) is aimed at consolidating business segments and unlocking value, The Economic Times reported citing sources.

The report said the transaction will most likely be a secondary portfolio sale. NewQuest is considered as the preferred buyer but Bain and CPPIP, which have existing exposures with various L&T companies, are also interested candidates.

Emails sent to L&T Finance and NewQuest Capital Partners didn’t elicit any response. Bain Capital and CPPIB declined to comment.

In May, the company said in an analyst presentation that it would monetise non-interest bearing assets in the form of proprietary equity and private equity units in two or three quarters and that it would redeploy capital in businesses that were making money. It had Rs 860 crore of assets in the form of private equity VC units as well as proprietary equity, it added.

Managing director Dinanath Dubhashi said at the time that the firm will use the capital gains arising out of this sale to make additional provisions and strengthen the balance sheet. The company also said that it would concentrate on its core business such as wholesale, rural and housing financing.

Both CPPIP and Bain Capital are existing investors at various units of Larsen and Toubro. In 2015, Bain picked up a stake of more than 10% in L&T Finance for about $200 million. In 2014, CPPIP invested $157 million in L&T Infrastructure Development Projects Ltd.

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L&T Finance Holdings in talks with Bain, others to sell PE portfolio

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