L&T Finance Holdings Ltd IPO - Subscribe - Eastern Financiers Ltd.

L&T Finance Holdings Ltd. (LFHL) is a financial holding company, offering a diverse range of financial products and Services across the corporate, retail & Infrastructure finance sectors, as well as mutual fund products and Investment management services, through its subsidiaries. Headquartered in Mumbai, the company has presence across 23 states in India.The operations of the Company are arranged into four business groups, viz. Infrastructure Finance-through L&T infrastructure finance Ltd., retail & corporate finance-through L&T Finance Ltd & Investment management- through L&T Investment management Ltd.

The objectives of the issue are to pay the intercorporate-deposit issued by the promoter to the company, to augment the capital base of L&T Finance and L&T Infra to meet capital requirements arising out of the expected growth in their assets and for other general corporate purposes including meeting the expenses of the issue.

The Company has a diversified business model, covering a variety of complementary, high growth business segments. Through its presence in high growth segments such as infrastructure and retail, the company is well poised to make most of the growth opportunities in these segments. During the period FY09-11, the consolidated loan book of the company has grown at a CAGR of 56.62%.

LFHL has established its presence in 23 states across the country. As on May 2011, the company has around 837 points of presence (including all business segments) across India which stacks up well against a network of 547 branches of Mahindra Finance and 488 branches of Shriram transport Finance spread across the country.

The Company has an experienced management team, with the senior managers having an average 20 years of experience in the Financial Services Industry.

L&T, which is the promoter group of the company, has a very high brand equity in the country.

LFHL has strong credit ratings from both CARE and ICRA. On May 31, 2011, L&T Finance had a CARE rating of AA+, ICRA rating of LAA+ and L&T Infra a CARE rating of AA+ (which offer high safety for the timely servicing of debt obligations and carry very low credit risk). These credit ratings, coupled with strong brand equity enables LFHL to access funds at competitive rates from a wide variety of market participants across a diverse array of products, including secured and unsecured loans from banks and financial institutions, commercial paper and long term debentures in the institutional and retail markets.

L&T Infrastructure Finance Holdings is likely to benefit through its presence in high growth infrastructure and retail finance segments by way of its subsidiaries. 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. At the upper end of the price band, the issue is attractively priced at 2.23XFY11BV (Considering post-issue BV) as compared to some of its peers. We recommend investors to SUBSCRIBE to the issue.

Source : Equity Bulls

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