<article>India’s largest engineering and construction company Larsen and Toubro Ltd (L&amp;T) will sell up to a 15% stake in its unit L&amp;T Technology Services Ltd through an initial public offering (IPO).</article>

India’s largest engineering and construction company Larsen and Toubro Ltd (L&amp;T) will sell up to a 15% stake in its unit L&amp;T Technology Services Ltd through an initial public offering (IPO).
In its filing to BSE on Friday, L&amp;T said it has decided to participate in the offer for sale of equity shares by way of an IPO of L&amp;T Technology Services.
L&amp;T Technology Services is a pure-play global engineering, research and development services company.
Prior to 1 January 2014, the business was conducted as a division of L&amp;T and as a sub-segment business of L&amp;T’s unit, L&amp;T Infotech Ltd.
As part of a business restructuring and consolidation exercise, L&amp;T transferred product engineering services of L&amp;T Infotech and its integrated engineering services to form L&amp;T Technology Services.
In fiscal years 2013 and 2014, revenue from integrated engineering business as a part of L&amp;T was Rs.1,224.8 crore andRs.1,628.1 crore, respectively, after certain adjustments. Further, in fiscal year 2013 and the nine months ended 31 December 2013, revenue from product engineering business as part of L&amp;T Infotech was Rs.420.3 crore and Rs.374.4 crore, respectively, after certain adjustments.
Post business restructuring and transfer of integrated engineering business and product engineering business to L&amp;T Technology Services, the audited revenue from the operations of L&amp;T Technology for the fiscal years 2015 and 2016, on an unconsolidated basis, was Rs.2,560.58 crore andRs.2,894.03 crore, respectively.
The decision to sell 15% of the stake in L&amp;T Technology Services comes two days after L&amp;T Infotech’s Rs.1,243 crore IPO was subscribed more than 11 times on the final day of its sale on Wednesday.
<a href="http://www.livemint.com/Companies/rKi2gyZO3s1UqmcVCOa0fL/LT-Infotech-IPO-will-excite-employees-but-put-them-under-p.html" target="_blank">In an interview last week</a> , A.M. Naik, group executive chairman at L&amp;T, had hinted at a share sale in L&amp;T Technology Services. He said the parent company had intentionally kept L&amp;T Infotech and L&amp;T Technology Services separate.
“In IT business, we are No. 6 (rank), but poor number six in the sense that there is a huge gap between number one and six. Even if I had both the companies together, I would still have been number six. General perception is that mid-sized companies will die as consolidation takes place; today, I have positioned L&amp;T and I tell all the customers that in the rat race of having to add 100 accounts every year, something or the other suffers; we are a mid-sized company and we are nimble, so we will serve you well,” Naik had said.
The IPO market in 2016 has retained the momentum that was witnessed in 2015, when 21 companies went public, raising Rs.13,614 crore.
So far this year, 12 companies have raised Rs.8,182.5 crore through IPOs, data from primary market tracker Prime Database shows.
“People are putting in money where they can see good returns in a short time, which is possible in IPOs. If companies price their offerings sensibly, then these deals will do well as there is a lot of appetite in the market across institutional, retail and high net-worth (HNI) categories,” said Munish Aggarwal, director at investment banking firm Equirus Capital.
Earlier this month, integrated business services provider Quess Corp. Ltd received a stellar response to its Rs.400 crore IPO, with the issue being subscribed 144.31 times, registering the fifth highest overall subscription (in percentage terms) for any IPO since 2000.
Several of the recent IPOs have done well on listing, and these listing gains are driving the interest seen from HNI and retail investors, he said.
“At the same time, a lot of money is flowing into mutual funds, which is driving domestic institutional appetite,” Aggarwal added.
Swaraj Singh Dhanjal contributed to this story.
<h4>This article was first published on <a href="http://www.livemint.com/Companies/3qE6Qrm4YrKmqdl1LZuJiJ/LT-to-sell-15-stake-in-LT-Technology-Services-via-IPO.html">Livemint.com</a></h4>

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India: L&T to sell 15% stake in L&T Technology Services via IPO

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