Morgan Stanley Investment Management, Templeton, ICICI Prudential Life and HDFC Mutual Fund are among the bulge-bracket investors to have bought into L&T Finance Friday, which successfully raised about Rs 1,000 crore in an exclusive share sale to institutions, two top market sources told ET.
“Both domestic and foreign institutional investors were keen to have their share of the pie as they see a great potential for non-banking finance companies amid sluggish bank-credit growth,” said one of the persons cited above.
The company said to have received overwhelming response of more than Rs 1700 crore for the issue.
The L&T Finance spokesperson declined to comment. Individual banks could not be immediately reached.
BSE Finance, a sector index, climbed 18.5% in the past one year, compared with a 15% rise in the broader Bankex.
The non-banking finance arm of India’s biggest construction company aims to strengthen its capital base and bankroll expansion. The two-day share sale closed Friday.
L&T Finance Holdings shares gained 0.8% to close at Rs 160 on the BSE Friday.
Citi Group, Edelweiss Financial Services, Motilal Oswal and JM Financial Services were the investment bankers for the sale.
Through this share sale to institutions, the company was supposed to reduce about 2.3-3.3% of its equity. With the increase in size, the dilution will be more now. The minimum application size was 2,000 equity shares.
Shares in L&T Finance surged about 32% in the past one year, compared with a 15.4% climb in the broader benchmark, the 30-stock Sensex.
In a separate move earlier in the day, L&T Finance Holdings said that it has completed the process of a preferential allotment to its parent Larsen & Toubro. The allotment of about 108 million shares of Rs 10 each was made at the issue price of Rs 185.51.
Meanwhile, HDFC Bank has appointed arrangers, including Bank of America Corp, Morgan Stanley and Credit Suisse Group AG, for a Rs15,500-crore planned share sale, Bloomberg reported.
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