Details of L&T Finance Holdings Limited IPO

The Issue	L & T Finance Holdings Limited
Sector	Financial Services
Transaction	Book Building
Issue Size	(*) equity shares of Rs 10 each aggregating to Rs 1245 crs
	(*)% of the post issue paid-up capital
IPO Dates	July 27th 2011 – July 29th 2011
Price Band	Rs 51 to Rs 59
Bid Lot	100 equity shares and in multiples of 100
IPO Grading	CARE: 5/5 Strong Fundamentals
Exchanges	BSE; NSE
Global Co-ordinators	JM Financial Consultants Private Limited; Citigroup Global
& BRLM	Markets India Private Limited; HSBC Securities & Capital
	Markets (India) Private Limited;
BRLM & Co-BRLM	Barclays Securities (India) Private Limited; Credit Suisse
	Securities (India) Private Limited; Equirus Capital Private Limited
Registrar	Sharepro Services (India) Private Limited

 Objects of the Issue

ü  Repayment of inter-corporate deposit issued by the Promoter to the Company;

ü  To augment the capital base of L&T Finance and L&T Infra, to meet the capital adequacy requirements to support the future growth in their business;

ü  To achieve the benefits of listing on the Stock Exchanges;

ü  For other general corporate purposes including meeting the expenses of the Issue.

 The Business

They are a financial holding company offering a diverse range of financial products and services across the corporate, retail and infrastructure finance sectors, as well as mutual fund products and investment management services, through their direct and indirect wholly-owned subsidiaries.

Their Company is registered with the RBI as an NBFC-ND-SI.

They are promoted by Larsen & Toubro Limited ("L&T"), one of the leading companies in India, with interests in engineering, construction, electrical and electronics manufacturing and services, information technology and financial services.

They are headquartered in Mumbai, and have a presence in 23 states in India. As at May 31, 2011, they had 837 points-of-presence across India, comprising 117 branch offices, 269 meeting centers, 37 KGSK centers and 414 customer care centers across all of their business groups and segments.

Strategy

ü  Continue to expand their business to include new products and services, as well as entirely new lines of business

ü  Increase the market penetration of their existing products and services

ü  Continue to focus on two key Indian growth stories: infrastructure and rural development

ü  Develop their financial products distribution business segment

ü  Continue to attract and retain talented professionals

ü  Continue to focus on the growth of their retail loan portfolio

                                                                                   

 

Strengths

ü  Diversified and balanced mix of high growth businesses

ü  Strong distribution network, with a presence throughout India

ü  Experienced management team and employees with a proven track record of establishing and growing new lines of business

ü  High quality loan portfolio comprising the funding of mainly income-generating assets and activities

ü  Good financial and capital position, as well as access to multiple sources of capital

ü  Strong parentage and brand equity of L&T

L&T Finance Holdings Ltd - Price Band fixed @ Rs: 51-59.

L&T Finance Holdings , a subsidiary of engineering and construction company L&T ,aims to garner Rs 1,075 crore through Initial Public Offering. The company on thursday, 20th Jul'2011 has fixed the price band of the IPO in between Rs 51 - 59 and the issue will be opened for subscription during July 27 and 29, 2011.

L&T Finance plans to sell shares worth about 1.60 billion rupees to anchor, or cornerstone, investors, said N. Sivaraman, senior vice president of financial services at Larsen & Toubro. This placement will reduce the net issue to the public.The issue, including the pre-IPO placement of shares and those to cornerstone investors, will result in a dilution of about 17% in the company's post-issue paid-up capital, said L&T Chief Financial Officer Y.M. Deosthalee.

The L&T Finance offering is being eagerly awaited as analysts term it a quality one with a strong parentage. Credit raiting agencies like CARE and ICRA have rated the IPO a full on 5/5, indicating that the fundamentals of the company are strong and indicate that he investors can apply for the shares of the company in the IPO. The ipo will be done through the book building process and the shares of the company will be listed on both the major stock exchanges of the country i.e., NSE and BSE

L&T Finance Holdings Ltd IPO

BRLM: JM Financial Consultants/Citigroup Global Markets/HSBC Securities and Capital Markets/Barclays Securities/Credit Suissue Securities/Equirus Capital.

Syndicate Member JM Financial Services P. Ltd/SMC Global Securities Ltd/ Karvy Stock Broking Ltd/IDBI Capital Market Services Ltd.

Issue Period: July, 27 to July, 29, 2011

Issue Size : Rs. 1245 cr

Price Band: Will be announced two working days prior to the issue opens

Lot Size: Will be announced two working days prior to the issue opens

Employee Discount : Will be announced two working days prior to the issue opens

Registrar: Sharepro Services (India) Private Limited

QIB Book: 50% of Net issue size

HNI Book: 15% of Net issue size

Retail Book: 35% of Net issue size

Apply IPOs through ASBA..!

Investment through the Initial Public offering (IPO) has been flair of the investors in India, for decades. This is also the primary step where in the investors learn investing in the stock market. Over the past decade it is observed that the participation of the retail investor for IPO has taken a large leap as they are proving to be an avenue to make quick money as the IPOs list at high premium to the issue price.
Retail investors are subscribing IPOs hand to hand and their increased participation is making the IPOs a success for the issuing company. Mostly the IPOs are oversubscribed i.e., more applications for the shares offered for sale by the company. It is almost certain that due to oversubscription, the investors will not get the number of shares they apply for in an IPO – most of the time two lots are alloted for four applied, one lot for five and sometimes nothing at all! Running in the race to apply for the shares in an IPO, investors run out of cheque leaves and also experience that the balance in the savings account has dip below the minimum balance required. Banks mostly charge penalties to the account holders who do not maintain a minimum balance. The securities market regulator and watch dog of the investor community in INDIA, the Securities and Exchange board of India (SEBI) has formulated a smarter way of investing in IPOs wherein you can make applications for IPOs with the amount residing in your account till the allotment is finalized. This way is called as “Application Supported by Blocked Amount” (ASBA). This facility can be an ‘Icing on the cake’ for the investors in the country.
ASBA- Application Supported by Blocked Amount is an application that authorizes the banker to block a specific sum of money in an individual's bank account for an IPO and debit the account only to the extent of the shares allotted to the individual. However, even as the blocked amount will not be available for use of the customer and he will continue to earn interest on it.
The benefits that an investor can derive from ASBA are
a) Cancelling and revising the bid is also possible.
b) The application amount is not debited from the savings account.
c) Keep earning interest on the amount parked in the Savings account. - List of SCSBs (including details Controlling Branch & Designated Branch)

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