L&T's Rs 7,500-Crore Fundraise To Refinance Maturing Debt: CFO
The group's total borrowing has risen to Rs 1.2 lakh crore in the December quarter.
Larsen & Toubro Ltd.'s Rs 7,500-crore fundraise will be used to refinance the maturing debt during the next financial year, Chief Financial Officer R Shankar Raman said on Wednesday.
The engineering conglomerate's board has long-term borrowing of up to Rs 7,500 crore, including via external commercial borrowings, term loans, non-convertible debentures or any other instrument as may be appropriate, according to an exchange filing on Tuesday. The development comes after it spent Rs 10,000 crore on its share buyback last year.
"The fundraise is for refinancing for maturity debt during FY25 within the current overall debt position," Raman told NDTV Profit on Wednesday. "The debt-to-equity ratio will be the same as of now, which is around 0.30:1."
As of December 2023, L&T's consolidated gross debt-to-equity ratio stood at 1.23 in comparison to 1.14 in March 2023. Its net debt-to-equity stands at 0.81 as of the third quarter of the current financial year. The group's total borrowing has risen to Rs 1.2 lakh crore in the December quarter from Rs 1.18 lakh crore during March 2023.
The company bought back shares worth Rs 10,000 crore in September, a first in its history. During the buyback, which was open from Sept. 18 till Sept. 25, it bought back 3.13 crore shares through the tender-offer route.
The buyback was part of L&T's plan to improve its return on equity as part of the group's 'Lakshya 2026' plan. It also was done with expectations to boost its earnings per share along with return on equity.
Shares of L&T were trading 1.41% higher at Rs 3,721.70 apiece on the BSE, compared to a 0.77% rise in the benchmark Sensex as of 11.47 a.m. The stock is up about 5% in 2024 so far and it has surged 72% in the last 12 months.
