- 25 Jul 2022
- ICICIdirect Research
L&T TO SELL 8 ROADS, TRANSMISSION PROJECT TO EDELWEISS FUND FOR - 7000 CRORE
LTF - 137 Change: -1.83 (-1.32 %)News: Engineering giant Larsen & Toubro (L&T) is selling its eight operational road assets that the company built and operated to Edelweiss Infrastructure Yield Plus, an infrastructure fund managed by Edelweiss Alternative Asset Advisors, for an enterprise valuation of Rs 7,000 crore. L&T IDPL portfolio consists of 8 roads project 3936 km developed and operated, transmission project include Bidadi to Kudgi covering 490 km and also manages 5 operational road assets of 2748 lane km. The transaction, yet to be made public, was signed earlier this month and is awaiting regulatory approvals from the National Highways Authority of India (NHAI) and the Securities and Exchange Board of India (Sebi).
Views: In line with its startegy of reaching consolidated ROE of 18% by 2026, the compnay as guided in last quarterly call is on the right track via exiting non core and asset heavy assets. We believe sale of IDPL would further bolster cash flow at consolidated level. The next key monitarable would be monetisation of power asset and raising equity in the Hyderabad metro, whihc when achieved (FY23-24) would lead to massive rerating of the stock.
Impact: Positive.