L&T Finance Ltd (LTF), a subsidiary of engineering solutions provider L&T Ltd, on Tuesday announced its plans for the financial services with the submission of draft for the proposed debt issue of the company amounting to Rs 500 crore.
The NCDs will be of face value of Rs 1,000 each aggregating to Rs 500-crore, with an option to retain over-subscription up to Rs 500-crore for issuance of additional NCDs, aggregating up to a total of Rs 1,000-crore.
The company targets largely to the retail and other non-institutional investors, including high net-worth individuals (HNI), while a separate quota has been allocated for the QIBs. Company?s senior officials mentioned that a draft prospectus in this regard was filed with the National Stock Exchange on Tuesday.
Speaking on company?s debt issue YM Deosthalee, chief financial officer and member of the board, L&T Ltd said, ?NBFCs like us were more dependent on bank finance for sources of funding. However, we have substituted this bank finance by opting for a debt issue. We are also interested to create a market for retail investors, as we believe in people oriented business. This would give more visibility and greater reach of the company in rural segment, where we had almost lost the connection after the sellout of our cement business.?
The multi product asset based finance company, LTF, also plans to expand its core business operations by foraying into general insurance on its own without any external alliance. Deosthalee informed that LTF targeted its asset base to swell up to Rs 12,000 crore by the current fiscal. ?With a view to keep a balanced portfolio the company has ventured into financial services and information solutions in addition to our existing line of business of large project solutions.?
LTF?s asset base stood at Rs 5,218 crore as on March 31, 2009, with presence at over 300 stations across the country. The company had launched a micro-finance initiative in four states including Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra covering almost two lakh customers from rural background. ?We have over 90% women participants, which proves more secure for our funding as we have faced zero defaults in micro-finance so far,? told Deosthalee adding that the company wanted to reach out to larger number of women participants.
Speaking to FE, Deosthalee mentioned that, the company would explore entrepreneurial skills of the people in Gujarat as well. ?We will also establish our micro-finance network in Gujarat, but that will be done in phase-wise manner,? told the official. The company also plans to expand its micro-finance network to Rajasthan. Currently, company?s total size of micro-finance venture is about Rs 100 crore, which it believes to shoot up in coming future.