Ready to list Larsen and Toubro’s ‘second baby’ in the stock market with over Rs 1,200 crore IPO of L&T Infotech, the conglomerate’s Group Executive Chairman A M Naik today said his aim is to make this company “number one” as he has ensured in all other businesses of the group.
He also said the immediate target for L&T Infotech, whose public offer will open on Monday, is to double its revenue to USD 2 billion (nearly Rs 13,500 crore) in next three years.
L&T Infotech Ltd is the sixth largest Indian IT services player at present with revenue of USD 887 million and an employee base of over 20,000 people.
The parent L&T, a conglomerate with presence in engineering, construction, infrastructure among other businesses, is already listed with a market cap of nearly Rs 1.5 trillion, while L&T Finance Holdings got listed over five years ago and commands a market cap of about Rs 14,000 crore.
At Rs 705-710 per share price band for L&T Infotech IPO, it will fetch a market cap of over Rs 12,000 crore.
Asserting that his entire focus at present is to ensure that the IPO is a huge success, Naik described it as the group’s “second baby” entering the stock market after L&T Finance’s listing nearly five-and-a-half years ago.
Asked about the revenue growth potential of the market- bound company, Naik told PTI in an interview, “At the moment, we are targetting doubling in three years time… So we want to become USD 2 billion.”
He, however, said many things depend on the events that will happen over the years and therefore first he is looking to make it “the number-one brand”.
Asserting that he does not want the company to be constantly compared with the companies like Infosys, Wipro, Cognizant and TCS, Naik said, “We don’t want to be compared that way. Whatever L&T does, it is number one and I like to be number one.”
USD 21-billion L&T Group has separated its technology businesses under two verticals — L&T Technology Services and L&T Infotech.
Together, Naik said, the two firms would have revenue of USD 1.5 billion this year and his aim is to make them account for at least 10 per cent of the group’s total revenue eventually.
Explaining the rationale for keeping them separate, Naik said, “If I mix it, it will still remain number-six and people will say the number one company is five times bigger. So, what do I achieve?
“Rather we will push Infotech with its core management totally focussed on IT, and for the other company the core management will be totally focussed on engineering. That way, will achieve both the objectives.”
Naik, who has been with the group for nearly 52 years including 18 years as its head, said the two companies can work together whenever the need arises.
He started the technology business nearly 20 years ago, which was mainly done at that time to keep the talent in-house as the group, which has as many as 82 businesses, was losing 700-800 employees a year to the IT industry at that time.