Larsen & Toubro Ltd said on Friday its engineering research and development unit has filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering.
The proposed IPO of L&T Technology Services Ltd will be an offer for sale of 10.4 million shares, India’s biggest engineering and construction company said in a stock-exchange filing. Larsen plans to sell a 15% stake in the unit through the offering, it added.
The planned issue comes days after another Larsen unit, L&T Infotech Ltd, floated its IPO. The public issue of the software services unit was covered more than 11 times, indicating strong investor interest.
L&T Technology will be the fourth group firm to list on stock exchanges. Parent L&T has been a public firm for decades while the group's financial services arm, L&T Finance Holdings Ltd, floated its IPO five years ago and L&T Infotech will list on the bourses in coming weeks.
L&T Technology offers R&D solutions for various industries such as industrial products, transportation, aerospace and telecom. It also offers services in areas such as mechanical engineering, embedded systems, besides proprietary solutions in engineering data analytics, and the Internet of Things.
The company was set up in January 2014 by carving out the product engineering services segment from L&T Infotech. The integrated engineering business from L&T was then transferred to the new entity in April 2014, as per the exchange filing.
L&T Technology reported Rs 2,894 crore revenue from operations for the financial year through March 2016, up 13% from Rs 2,560 crore the year before.
The issue will be managed by JM Financial, Kotak Investment Bank and Bank of America Merrill Lynch, media reports said previously.
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