More equity dilution in L&T Infotech

L&T Infotech, which is going for Rs 1,200-crore public offer, will see further equity dilution in coming years to bring down the stake of the parent company, Larsen & Toubro, to 75 per cent. In its IPO, L&T is offering  10.3 per cent of its stake to the public at a price of Rs 705- Rs 710, valuing L&T Infotech at around Rs 12,000 crore. The company will issue shares to employees too, based on their performance, said AM Naik, chairman of L&T.

Ahead of the IPO announcement, shares of India's largest engineering and construction company hit an eight-month high (at Rs 1,575) on Monday, gaining on the back of higher volumes for the six consecutive session. The IPO will open on July 11 and close on July 13. Citigroup Global Markets, Kotak Mahindra Capital and ICICI Securities are the book running lead managers to the issue.

In the last financial year, L&T Infotech reported a consolidated revenue of Rs 5,847 crore, up 17.5 per cent compared to the previous year, and a profit of Rs 922 crore (up 20 per cent). The operating margins stood at 21.4 per cent. The company has a net worth of Rs 2,022 crore.

The company offers IT services to over 250 clients in industries such as banking and financial services, insurance, energy, retail, pharmaceuticals, media and entertainment, and automotive and aerospace. In 2015, Nasscom ranked the company as the sixth-largest Indian IT services company in terms of export revenues.

L&T Infotech is structured around two businesses-the industrials and the services clusters. The industrials cluster caters to clients in sectors such as manufacturing, energy and utilities, hi-tech and consumer electronics, automotive and aerospace, engineering and construction. The services cluster focuses on banking, financial services, insurance, travel and logistics, media and entertainment and healthcare.  L&T Infotech has employee strength of 21,073. Around 52.5 per cent of these employees are working onsite while 47.5 per cent have offsite assignments.