L &T Finance, the NBFC arm of L&T, is planning to raise Rs 7,000 crore through borrowing during the current fiscal. The company, with an asset base of Rs 5400 crore, is also betting high on construction equip finance in a big way during the current fiscal, keeping in view the government?s plan to spend Rs 3.5 lakh crore in the infrastructure sector over next 5-7 years.
Talking to media in Mumbai on Wednesday, N Sivaraman, executive vice president, L&T (financial services), said that we see an opportunity in the government?s huge expenditure plan in the infrastructure sector. However, he said that our requirements in equities are not very large. The company has got two verticals namely corporate finance group and retail finance group.
Save for the year 2008-09, the company?s profit has been increasing at the rate of 50-55% for past few years, said Sivaraman. On his company?s plan to make foray into general insurance business, Sivaraman said that the investment in non-life business was not very large and he sees a similarity of eco system between L&T and L&T Finance. Currently, the company is evaluating its plan for the proposed general insurance business. The company is also looking at financing construction equipment and commercial vehicles. The cost of fund of the company is currently pegged at 9.5-10%.
The company is also looking for a foray in the mutual fund business. Headquartered in Mumbai, the company had 78 branches and 233 points of presence in major cities in India. In microfinance, the company has got a client base of 200,000 as of now in states like Andhra Pradesh, Karnataka, Tamil Nadu and Maharashtra. LTF?s revenue for the year ending March 31, 2009 stood at Rs 830.28 crore. The company generated return on assets over 1.9% in past five years.
