L&T plans to focus on green energy, new- age businesses
2 min read . Updated: 21 Dec 2022, 08:23 PM IST
Premium- L&T will also sell its remaining stake in the infrastructure investment trust that it had set up in 2018
MUMBAI : Larsen & Toubro Ltd will focus investments in green energy, green hydrogen and new-age businesses such as data centres, a top company executive said, after India’s largest construction company recently agreed to sell its stake in L&T Infrastructure Development Projects (L&T IDPL).
On Saturday, Larsen & Toubro and Canadian pension fund manager Canada Pension Plan Investment Board said they have agreed to sell 100% shareholding in L&T IDPL and its subsidiaries to Edelweiss Alternative Asset Advisors’s Infrastructure Yield Plus Strategy fund at an enterprise value of ₹6,000 crore.
L&T and CPP Investments will get gross proceeds of ₹2,723.4 crore from the stake sale.
The L&T IDPL portfolio comprises eight roads and one power transmission asset, spanning 4,900 lane-kms and 960 circuit kms respectively.
“L&T will continue to invest in new areas like green energy, data centres and other new-age businesses. L&T has plans to invest around $2.5 billion in renewables space—green energy, green hydrogen," D.K. Sen, wholetime director & senior executive vice-president—development projects, L&T said in an interview.
The IDPL portfolio sale was part of L&T’s strategy to exit non-core assets, Sen said.
“During the last 20 years, we developed 15 roads and one transmission line. They are all operating and generating cash flows. But sometime back, L&T decided that we will exit from non-core assets and we wanted to focus only on three major verticals: Services, high-tech manufacturing and EPC. And so, we decided not to invest more into such kind of infrastructure assets and do not have any plans to invest in these platforms in near future," said Sen.
Sen added that L&T will also sell its remaining stake in the infrastructure investment trust (InvIT) that it had set up in 2018 with investment from CPPIB.
MINT PREMIUM See All
“Our share in the InvIT was about 15%, which has now come down to 6% and by March 2023, we will sell the balance stake and completely exit the InvIT," he said.
The construction firm is bullish on the outlook for the infrastructure sector, backed by government capital expenditure.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less