L&T Announces Rs 12,000 Crore Debt Fundraising and Appoints New Deputy Managing Director

L&T Plans Rs 12,000 Crore Debt Fundraising Alongside Key Leadership Changes

Larsen & Toubro (L&T), the engineering and construction conglomerate valued at $27 billion, has announced plans to raise Rs 12,000 crore through various debt instruments to meet its financial requirements. This significant fundraising initiative comes alongside important organizational changes at the top management level.

Comprehensive Debt Fundraising Strategy

The company intends to explore multiple avenues for its debt fundraising, including:

• Non-convertible debentures
• External commercial borrowings
• Term loans

L&T has indicated that specific terms of these debt instruments will be disclosed upon finalization of the arrangements. This approach aligns with the company's historical preference for debt-based fundraising mechanisms.

During the previous fiscal year (FY 2024), L&T had issued non-convertible debentures worth Rs 7,000 crore and commercial papers totaling Rs 46,975 crore. The newly announced fundraising is expected to serve dual purposes of refinancing matured debt and meeting capital expenditure requirements for ongoing and future projects.

Strategic Leadership Changes

In a parallel development, L&T announced that Subramanian Sarma, who currently heads the energy unit, has been promoted to the position of Deputy Managing Director. Sarma, 67, will officially assume his new role on April 2, 2025.

Sarma's career trajectory at L&T has been notable - he joined the company's board directly in 2015, coinciding with S N Subrahmanyan's appointment as Deputy MD at that time. This direct board entry highlighted his strategic importance to the organization.

Leadership Succession Planning

Sarma's elevation is viewed as part of L&T's ongoing initiative to nurture internal talent for leadership positions. Under his guidance, the energy division has grown to become a significant contributor to L&T's overall business performance, accounting for approximately:

• 14% of L&T's revenue
• 25% of the company's order book

In his new capacity, Sarma will maintain direct reporting to S N Subrahmanyan (often referred to as SNS), who currently serves as the Chairman and Managing Director of L&T. Sarma will effectively be second-in-command in the organization's hierarchy.

The company has specified that Sarma's appointment as Deputy MD will be for a three-year term, valid until February 3, 2028, by which time he will turn 70 - aligning with the company's HR policy that stipulates retirement at 70 for executive directors.

Board Composition and Additional Updates

L&T currently has six executives serving on its board. In addition to SNS and Sarma, the executive directors include:

• R Shankar Raman (handles finance)
• S V Desai (oversees civil infrastructure)
• T Madhava Das (utilities)
• Anil Parab (heavy engineering)

The company also announced the reappointment of Desai and Das for five additional years from July 11, 2025, demonstrating stability in its leadership team.

In a separate development, L&T disclosed that it will allot 17,150 equity shares to "those grantees who had exercised their options under the company's employee stock option schemes."

Unique Ownership Structure

A distinctive feature of L&T is its operation without an identifiable promoter. The company's employees, through a trust, own approximately 14% of the organization. This structure contributes to L&T's reputation as a proxy for the investment cycle in India, with its performance often seen as reflective of broader economic trends in the country's infrastructure sector.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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NSE Revolutionizes Share Transfer Process: Timeline Reduced from 6 Months to 5 Days

NSE Revolutionizes Share Transfer Process: New System Reduces Timeline from 6 Months to Just 3-5 Days

The National Stock Exchange of India (NSE) is set to implement a significant operational change that will dramatically accelerate the transfer of its unlisted shares between investors. Starting Monday, March 24, the exchange will transition from its current approval-based system to the more efficient Delivery Instruction Slip (DIS) mechanism, slashing transfer timelines from up to six months to merely 3-5 days.

Major Overhaul in Share Transfer Procedure

In an official communication to shareholders, NSE announced: "Given Sebi's circular dated October 14, 2024, the ISIN of NSE will be activated/unfrozen with effect from Monday, March 24. Accordingly, from Monday, the shares of NSE can be transferred through the DIS mechanism without following the existing Stage 1/Stage 2 process."

This procedural transformation eliminates the previous two-stage verification process that had become notorious for causing substantial delays in share transfers. Under the outgoing system, each transaction required:

• Stage 1: Comprehensive know-your-customer (KYC) verification
• Stage 2: "Fit and proper" assessment of the investor

Why The Previous System Created Bottlenecks

The existing manual verification system had become a significant impediment to efficient share transfers. Industry experts point out that the exchange's limited staff conducted physical verification for each shareholder, creating a processing backlog that grew as demand for NSE shares increased in the unlisted market.

Under the new framework, these critical verification procedures will be handled by depositories that already maintain comprehensive investor records, effectively eliminating the bottleneck that had plagued the previous system.

Addressing Growing Investor Frustration

The timing of this change is particularly significant as investor frustration had been mounting over the extended transfer timelines. Market participants report that the prolonged waiting periods were deterring potential investors, particularly institutional players.

"Delays of up to six months unsettled institutional investors," noted Hitesh Dharawat, a broker at Mumbai-based Dharawat Securities. "By the time the transfers were completed, share prices often changed, leading to the cancellation of many deals."

Impact on NSE's Unlisted Market Performance

NSE shares have demonstrated remarkable performance in the unlisted market, doubling in value over the past year. They currently trade at approximately Rs 1,850 per share on an ex-bonus basis. As of December 31, 2024, the exchange reported 20,444 shareholders.

Market experts anticipate that the streamlined transfer process could further enhance liquidity and potentially impact valuation as more investors may enter the market with reduced procedural concerns.

Regulatory Framework Still in Place

Despite the simplified process, regulatory oversight remains robust. Under SEBI regulations, only investors meeting the "fit and proper" criteria are eligible to hold shares in a stock exchange or clearing corporation. Additional conditions include:

• Investors acquiring more than 2% of shares must seek regulatory approval within 15 days
• Holdings exceeding 5% require prior approval from the board

How The New DIS Mechanism Works

To transfer shares from one demat account to another under the new system, investors will need to file a Delivery Instruction Slip provided by their broker. This form requires specific details including:

• The 12-digit ISIN code
• The 16-digit DP ID and Client ID
• Selection of the appropriate transfer mode (off-market for intra-depository transfers or inter-depository for others)

This standardized process aligns NSE share transfers with the procedures already established for listed securities, creating a more familiar and predictable experience for investors.

The move comes as NSE continues preparations for its much-anticipated initial public offering (IPO), with the streamlined share transfer process potentially enhancing its market appeal ahead of the public listing.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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