L&T to Raise ₹12,000 Crore via Debt Instruments
Financial Needs and Organizational Changes
L&T plans to raise ₹12,000 crore through debt instruments to fulfill its financial requirements. The company will consider non-convertible debentures, external commercial borrowings, and term loans, with specific terms to be disclosed later.
Organizational Changes
- Subramanian Sarma, current head of the energy unit, has been promoted to Deputy Managing Director.
- Sarma will take up his new role on April 2.
- Sarma joined L&T’s board directly in 2015, around the same time S N Subrahmanyan (SNS) became Deputy Managing Director.
- SNS currently serves as the Chairman and Managing Director of L&T.
L&T usually raises funds through debt and uses the money to refinance matured debt and cover capital expenditure needs. In fiscal 2024, the company issued non-convertible debentures worth ₹7,000 crore and commercial papers totaling ₹46,975 crore.
Sarma’s Promotion and L&T’s Leadership Strategy
Sarma’s promotion aligns with L&T’s strategy to develop internal talent for leadership positions. The energy division, under Sarma’s leadership, contributes significantly (around 14% and 25%) to L&T’s revenue and order book. In his new role, Sarma will report directly to SNS and be second-in-command.
L&T’s Board of Executives
- L&T has six executives on its board, including SNS and Sarma.
- Other board members are R Shankar Raman (finance), S V Desai (civil infrastructure), T Madhava Das (utilities), and Anil Parab (heavy engineering).
- L&T has reappointed Desai and Das for five more years starting from July 11.
- The company will issue 17,150 equity shares to “those grantees who had exercised their options under the company’s employee stock option schemes”.
L&T operates without a clear promoter, with its employees owning 14% of the company through a trust, often seen as an indicator of the investment cycle in the country.
