DEFINITION

OF

'INITIAL

PUBLIC

OFFERING - IPO'

The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded. In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), the best offering price and the time to bring it to

market. Also referred to as a "public offering".

IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future because there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, which are subject to additional uncertainty regarding their future values.

HISTORY OF LARSEN AND TOUBRO

The company was founded in Mumbai in 1938 by two Danish engineers, Henning HolckLarsen and Sren Kristian Toubro. The company began as a representative of Danish manufacturers of dairy equipment. However, with the start of the Second World War in 1939 and the resulting restriction on imports, the partners started a small workshop to undertake jobs and provide service facilities.

(HENNING 4.7.1907 27.02.1906 4.3.1982 -

HOLCK-LARSEN) 27.7.2003

(SOREN KRISTIAN TOUBRO)

Germany's invasion of Denmark in 1940 stopped supplies of Danish products. The war-time need to repair and refit ships offered L&T an opportunity, and led to the formation of a new company, Hilda Ltd., to handle these operations. L&T also started two repair and fabrication shops signalling the expansion of the company.

The sudden internment of German engineers in India (due to suspicions caused by the War), who were to put up a soda ash plant for the Tatas, gave L&T a chance to enter the field of installation. In 1944, ECC was incorporated by the partners; the company at this time was focused on construction projects (Presently, ECC is the construction division of L&T). L&T decided to build a portfolio of foreign collaborations. By 1945, the company manufacturers manufacture represented of equipment products such British used to as

hydrogenated oils, biscuits, soaps and glass. In 1945, the with USA, company for signed an agreement Company, Caterpillar marketing Tractor earth

moving equipment. At the end of the war, large numbers of war-surplus Caterpillar equipment were available at attractive prices, but the finances required were beyond the capacity of the partners. This prompted them to raise additional equity capital, and on 7 February 1946, Larsen & Toubro Private Limited was born.

Post Independence

Independence and the subsequent demand for technology and expertise offered L&T the opportunity to consolidate and expand. Offices were set up in Kolkata (Calcutta), Chennai (Madras) and New Delhi. In 1948, fifty-five acres of undeveloped acquired in uninhabitable marsh Powai, swamp and is jungle presently was That a Mumbai.

manufacturing landmark. In December 1950, L&T became a public company with a paid-up capital of

Rs.2 million. The sales turnover in that year was Rs.10.9 million. Notable orders executed by the Company during this period included the Amul Dairy at Anand and Blast Furnaces at Rourkela Steel Plant. With the successful completion of these jobs, L&T emerged as the largest erection contractor in the country. In 1956, a major part of the company's Mumbai office moved to ICI House in Ballard Estate, Mumbai; which would later be purchased as by L&T the company its and renamed House, present

Corporate Office. The sixties were also a decade of rapid growth for the company,

and witnessed the formation of many new ventures: UTMAL (set up in 1960), Audco India Limited ( 1961), Eutectic Welding Alloys (1962) and TENGL (1963). In 1976, Holck-Larsen was awarded the Magsaysay contribution 1978. Award in to for India's International of his industrial Understanding recognition

development. He retired as Chairman in

Operating Divisions
Engineering Projects. L&T Power. and Construction

 Heavy engineering. Construction. Electrical and electronics. Information technology. L&T machinery & industrial products.

Subsidiaries & Joint Ventures

L&T - Komatsu Limited. L&T Finance. Larsen and toubro infrastructure finance. L&T Integrated Engineering Services (IES). L&T Valves.

 L&T Institute of Technology.

L&T Finance IPO from L&T Finance Holdings

L&T

finance

holdings

limited

subsidiary of Larson & tourbo issues initial public offering of equity shares with a

face value of rs.10 with price of band of rs.51 to rs.59 per share. L&T finance holdings limited incorporated in 2008, which offers a wide range of financial products and services. The company is promoted by Larson & toubro limited, one of the leading companies in India. The L&T finance holdings limited 2.44

issues IPO of around 2.11 crore to crore equity shares to raise

around

rs.1245 crore. The IPO is 100% book built issue and one can bid for a minimum of 100 equity shares and the multiple of 100 equity shares thereafter.

The issue already opened today, 27th July, 2011 and will be closed on 29th july,2011. This is a grade 5 IPO which indicates strong fundamentals. The shares will be listed will be listed in both BSE and

NSE , the book running lead managers (BRLMs) are Citigroup global markets India private limited, HSBC securities & capital markets Pvt. ltd and JM financial consultants Pvt. ltd and the registrar is sharepro services Pvt. ltd. The bankers for issuing IPO are axis bank ltd, OBS bank ltd, city union bank ltd, Dhanlaxmi bank ltd. The federal bank ltd, Citibank N.A, the hongkong &

shanghai banking corporation ltd., ICICI bank ltd, IDBI bank ltd, state bank of India and HDFC bank ltd.

L&T Finance Holding IPO Issue Detail: Issue Open: Jul 27, 2011 - Jul 29, 2011 Issue Type: 100% Book Built Issue IPO Issue Size: Equity Shares of Rs. 10 Issue Size: Rs. 1,245.00 Crore Face Value: Rs. 10 Per Equity Share Issue Price: Rs. 51 - Rs. 59 Per

Equity Share Market Lot: 100 Shares Minimum Order Quantity: 100 Shares Listing At: BSE, NSE

Till 29 July 2011, Final Subscription Qualified Institutional Buyers (QIBs): 1.93 times Non Institutional Investors: 6.18 times Retail Individual Investors (RIIs): 9.61 times Employee Reservations: 1.53 times Others: 3.35 times

Total Subscription: 5.34 times (L&T Finance IPO Subscribed)

Capital Structure

Pre Issue Equity: Rs. 1477.02crs Post issue Equity: Rs. 1748.04crs Listing: BSE & NSE Lead Managers: JM Financial Consultants Pvt. Ltd, Citigroup Global Markets India Pvt. Ltd, HSBC (India) Securities Pvt. Ltd, & Capital Barclays Markets

Securities (India) Pvt. Ltd, Credit Suisse Securities (India) Pvt. Ltd

Co- Book Lead Manager: Equirus Capital Pvt. Ltd.

Registrar

to

issue:

SharePro

Services

(India) Pvt. Ltd L&T Finance Holdings, a subsidiary of engineering conglomerate L&T opens its IPO for subscription today for Jul 27, 2011 aggregating to Rs 1,245crores. The IPO was subscribed 0.46 times on Day 1. The IPO received bids for 9.82crore shares, compared with 21.45crore shares on offer. The company has fixed a price band of Rs 51-59 per share. The company is aiming for a 17% stake dilution. The issue closed on Friday, 29 July 2011.

L&T Finance Holdings on Tuesday said the company has raised around Rs. 153crore from anchor investors for its initial public offer, which opened for subscription yesterday. The company is allocating equity

shares to anchor investors at a price of Rs. 56 apiece, aggregating to Rs. 153crore. "The Reserve Bank of India's higherthan-expected hike on Tuesday weighed on the anchor investment in L&T Finance Holdings at the company has raised Rs 153crore by placing shares of three institutional investors at Rs 56 per share", says a report by Nirmal Bang Securities.

Earlier, the company had raised around Rs 330crore through private equity from Capital International PE Fund through a pre-IPO placement. The proceeds from the issue will be used to augment the capital base of L&T Finance and L&T Infra and to meet the capital requirements arising out of expected growth in their assets, primarily the loan portfolio.

Currently

the

parent

firm

Larsen

&

Toubro (L&T) holds 95.94 per cent in the company and the remaining 4.06 per cent

is held by private equity fund Capital International. Post listing, parent L&T's stake in the company would come down to 83 per cent. L&T Finance Holdings offers diverse range of financial products and services across corporate, retail and infrastructure finance sectors through its wholly owned subsidiaries. Lots of brokerages are bullish on L&T Finance Holding IPO and suggested to subscribe keeping long- term perspective in mind.

Nirmal Securities

Bang

"L&TFH shares is offered at 2.04x P/BV and 16.9x P/E calculated at higher band of price for FY12E as compared to its peers the offer looks fairly priced for near term and does not offer a potential upside on listing. However, we believe with diversified credit portfolio, L&T Finance can weather these issues better than its peers.

Eastern Financers

Eastern Financers has advised investors to 'Subscribe' to the initial public offering of L&T Finance Holding. The issue is attractively priced as compared to peers. Although the company currently has a relatively smaller book size compared to its peers but the business model is scalable and the growth opportunities in these segments continue to remain high. Aditya Money Aditya Birla Money has recommended long term investors to 'Subscribe' to the Birla

initial public offering of L&T Finance Holdings. Given the pedigree and trust, it is an excellent long term bet; however listing gains would largely be a function of market conditions and going by the current market parity, we believe the short term gains would be at best marginal. Therefore recommend long term investors to subscribe to this issue," the report said

Sharekhan Ltd Sharekhan is of the view that the initial public offering of L&T Finance Holdings is

available

at

marginal

premium

to

players like IDFC and PFC. "The issue is priced at 2.3x FY2011 book value (BV; based on post issue equity) which is at a marginal premium to players like IDFC, PFC etc though the business model is not strictly comparable. SMC SMC has advised investors with long term perspective to consider the initial public offering of L&T Finance. Considering the P/E valuation on the upper end of the price band of Rs 59, the stock is priced at pre issue P/E of 22.20x on its annualised FY11 EPS of Rs 2.66.

L&T Finance Holdings has opened its IPO on 27th July 2011 in the price band of Rs 51-59. This is the biggest IPO issue of this financial year and the company expects to Rs 1,092 crore out of the total issue size of Rs 1,245 crore. It is expected to be listed at a price of Rs 64, 65. Brokerage Nirmal Bang has advised investors with long term perspective to subscribe to the initial public offering of L&T Finance Holdings. The issue looks fairly priced for the near term, the brokerage said, but warned that it does not offer a potential upside on listing.

L&T Finance Holdings Ltd (LFHL) is financial holding company offering a diverse range of financial products and services across the corporate, retail and infrastructure finance sectors, as well as mutual fund products and investment management services, through its direct and indirect wholly owned subsidiaries. LFHL is registered with the RBI as an NBFC-ND-SI. It is promoted by Larsen & Toubro Limited (L&T), one of the leading companies in India, with interests in engineering, construction, electrical and electronics manufacturing and services,

information services.

technology

and

financial

L&T Finance IPO hits its 1st Day in Market L&T Finance Holdings hit the primary market on July 27, 2011. The IPO was subscribed 46%on the first day of the issue. The price band decided for the IPO is Rs. 51 to Rs. 59 per share. The issue

closes on July 29, 2011. The IPO received bids for 9.82crore shares, compared with 21.45crore shares on offer. The company has intended to raise Rs 12.45 billion from this initial public offering. The company has raised around Rs 1.6 billion by selling shares to its anchor investors those are DSPBlackRock, and investment arms of Malaysia's Khazanah and U.S. private-equity fund Capital International. The company has raised almost Rs. 153.04crore by selling 2.73 shares at Rs. 56each.

The company has earlier raised Rs. 330crore from a private placement of 6crore equity shares which the company sold at Rs. 55 per share to the private equity fund of Capital International of the US on 7 July 2011. L&T Finance Holdings is the financial holdingcompany of L&T. It offers a diverse range of financial products and services through its four operating subsidiaries. These are L&T Finance, L&T Infrastructure Finance; India Infrastructure Developers and L&T Investment. The proceeds of the IPO will be used for expansion plans of

two of its subsidiaries - L&T Finance and L&T Infrastructure Finance.

Indian shares end down 2nd Day; banks, L&T fall Indian shares declined for the second day, closing nearly 1 percent lower on Wednesday, with financials leading the fall on concerns their margins could shrink in the near term. Weak world markets also kept the sentiment subdued. Banks have been raising their deposit rates to fend off tight cash conditions, while building inflation pressure is expected to trigger a hawkish monetary stance by the central

bank, a move that could douse demand for loans Deposit rates are shooting up and it doesnt look like lending rates will keep pace with them. This will impact banks net interest margins, Ambareesh Baliga, vice-president of Karvy Stock Broking, said. Also, asset quality is a big concern. And the RBI (Reserve Bank of India) may also hike rates to contain inflation. The Reserve Bank of India, which had raised rates six times in 2010 before

pausing in December, is widely expected to hike key rates at its policy review scheduled for Jan. 25.[ID:nBMA009267] The 30-Share BSE index .BSESN closed 0.96 percent, or 197.62 points, lower at 20,301.10 points, with 24 of its

components closing in the red. Volume was low with only 308 million shares changing hands on BSE, where declining shares were nearly double the advancing ones. The benchmark index climbed 17.4 percent in 2010, backed byrecord foreign

fund investment of $29.3 billion. Leading lenders State Bank of India (SBI.BO), ICICI Bank (ICBK.BO) and HDFC Bank (HDBK.BO) shed between 1.3 percent and 3.1

percent. Larsen & turbo (LART.BO)

L&T Finance Holdings IPO slips below issue price

Shares of L&T Finance Holdings , a subsidiary construction of engineering company Larsen and and

Toubro , debuted below the issue price of Rs 52 a share on August 12. At 9:48 hours IST, the stock was trading at Rs 51.35, down 1.25%. It has touched a high of Rs 53.85, which was the opening price and low of Rs 49.30 a share. Traded volume on the National Stock Exchange was more than three crores equity shares. CMD of L&T, AM Naik said L&T Finance's contribution in the entire group would go up to 30% from 10% in future.

L&T Finance received Rs 1,245crore through the issue. Parent company L&T's stake in the company reduced to 83% post issue. Company intends to use issue proceeds for augmenting the capital base of L&T Finance and L&T Infra to meet the capital requirements portfolio. arising out of expected growth in their assets, primarily the loan

Issue

Subscription

Detail

Current

Bidding Status
Number of Times Issue is Subscribed (BSE + NSE)

As Time

on

Qualified

Non

Retail Individual Investors (RIIs)

Employ ee Reserva tions Others Total

Date &

Institution Institutional al Buyers Investors (QIBs) (NIIs)

Shares Offered / Reserve d Day 1 Jul 2011 17:00 IST Day 2 Jul 2011 17:00 IST Day 3 Jul 2011 19:45 IST 29, 1.9300 6.1800 9.6100 1.5300 3.3500 5.3400 28, 0.7200 0.5000 2.2100 0.5100 0.9600 1.2200 27, 0.6400 0.3900 0.4600 0.0300 0.1700 0.4600 75,382,41 6 31,617,647 73,774,510 10,204 ,082 23,529 214,50 ,412 8,067

L&T Finance IPO Listing Date

Listing Date: NSE Symbol: Friday, August 12, 2011 L&TFH

BSE Scrip Code: 533519

Listing In: Sector: ISIN: Issue Price: Face Value:

B Group of Securities INE498L01015 Rs. 52.00 Per Equity Share Rs. 10.00 Per Equity Share

Listing day Trading Information

Particulars Issue Price Open Low High Last Trade Volume NSC Rs.52.00 Rs.53.85 Rs.49.30 Rs.53.85 Rs.50.05 98,188,155 BSC Rs.52.00 Rs.51.00 Rs.49.50 Rs.52.50 Rs.49.95 44,321,154

Balancesheet - Larsen & Toubro Ltd.

Particulars Liabilities Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans TOTAL LIABILITIES Assets Gross Block (-) Acc. Depreciation Net Block Capital Work in Progress. Investments. Inventories 8,897.02 2,220.82 6,654.07 785.00 14,684.82 1,577.15 7,235.78 1,727.68 5,484.81 857.66 13,705.35 1,415.37 5,575.00 1,421.39 4,129.02 1,040.99 8,263.72 5,805.05 4,188.91 1,242.47 2,920.54 699.00 6,922.26 4,305.91 2,876.30 1,122.83 1,725.54 471.22 3,104.44 3,001.14 Mar'11 12 Months 490.08 21,334.05 21,846.26 1,063.04 6,098.07 29,007.37 Mar'10 12 Months 145.53 18,142.82 18,311.64 955.73 5,845.10 25,112.47 Mar'09 12 Months 117.14 12,317.96 12,459.69 1,102.38 5,453.65 19,015.72 Mar'08 12 Months 58.47 9,470.71 9,555.08 308.53 3,275.46 13,139.07 Mar'07 12 Months 56.65 5,683.85 5,768.43 245.40 1,832.35 7,846.18

Sundry Debtors Cash And Bank Loans And Advances Total Current Assets Current Liabilities Provisions Total Current Liabilities NET CURRENT ASSETS Misc. Expenses TOTAL ASSETS (A+B+C+D+E)

12,427.61 1,730.35 19,499.23 35,234.34 26,139.56 2,233.43 28,372.99 6,861.35 0.00 29,007.37

11,163.70 1,431.87 12,662.55 26,673.49 19,443.77 2,188.36 21,632.13 5,041.36 0.00 25,112.47

10,055.52 775.29 7,198.85 23,834.71 15,211.04 3,066.53 18,277.57 5,557.14 0.26 19,015.72

7,365.01 964.46 3,861.10 16,496.48 11,892.75 2,035.42 13,928.17 2,568.31 3.06 13,139.07

5,504.64 1,094.43 2,449.14 12,049.35 8,362.01 1,180.13 9,542.14 2,507.21 9.84 7,846.18

CURRENT SHARE PRICE Open price - 1352.50 High price - 1381.75 Low price -1341.00 Prev. close - 1364.45 Average price - 1362.78 No. of contracts traded - 12,797

 Turnover (Rs. In lakhs) - 43,598.74 Market lot - 250 Open interest - 5,136,750 Open interest change - 62,250 Open interest change % - 1.23

SHARE PRICES FROM 2011 TO 2012

Year Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12

Open 1484.70 1666.50 1642.70 1736.30 1347.00 1305.00 1319.00

High 1514.95 1675.00 1685.00 1768.00 1347.00 1325.00 1321.00

Low 1463.05 1643.45 1642.00 1736.60 1303.35 1286.60 1278.00

Close 1496.70 1650.95 1682.35 1762.90 1318.25 1296.70 1310.60

Volume 287451 252960 292438 97880 536399 454011 703549

CONCLUSION

Current financials till 26th Aug 2011

L & T has performed robustly in all its parameters over the last 10 years. Its impressive fundamentals in the past form a strong base for its future. L&T has clocked an impressive CAGR of 67% in its EPS which has been possible due to the strong investment back into the business which is evident from its high BVPS CAGR of almost 50%. Also, it has improved its margins over the years from a stagnant average of 10-11% from FY 03 to FY 06 to 15% in the last 4 years. In fact in 2010 the companys operating margin has increased to 19%.

Its Sales have registered a CAGR of 19.6% over the last 10 years, indicating a good order inflow over the years. Over the past 5 years the CAGR of order inflows has been 33%. This has helped the company register an impressive 67.2% CAGR over the last 10 years. Share prices went up till August 2011 but it dipped drastically after that and there was a slight growth in February 2012. Now it is expected to grow further.