Larsen & Toubro Ltd (L&T), a Mumbai-based engineering and technology company, is planning to launch a private equity fund to invest in power and road projects in India. The fund size is expected to be in the range of $300 million, reports Bloomberg. The company is likely to bring in a Singapore-based partner in this fund.
The move is part of the company’s plan to tap the high growth investment segment, as infrastructure will remain a priority with the government of India in the next few years.
The announcement also follows some big ticket investments made recently by global private equity giants in the infrastructure space in India. In one such investments in March this year, Morgan Stanley-led consortium has put in $425 million in Asian Genco Pte Ltd (AGPL), which has investments in Indian power generation assets and engineering services businesses.
In March, the government of India has announced its plan to double its spending on building utilities, roads and ports to $1 trillion (around Rs 45,00,000 crore) in the 12th five year plan starting 2012-13. The government is also expecting about 50% of this investments coming from private sectors.
L&T is planning to invest the fund outside its group activities, the report adds quoting N Sivaraman, senior vice president for financial services. The fund will help L&T to support its activities in infrastructure space that are coming to its fold, including some highway projects in Mumbai. L&T is primarily engaged in the technology, engineering, construction and manufacturing space.
The shares of the company were traded at Rs 1,555.00, down by Rs 15.90 or 1.01% at 12.54 pm in the Bombay Stock exchange today.