L&T Announces Hyderabad Metro, Nabha Power Plant and L&T IDPL Sale
August 31, 2021 at 07:44 am EDT
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Larsen & Toubro Limited (BSE:500510) plans to sell its non-core assets - 1400 megawatt (MW) Nabha thermal power project in Punjab, the Hyderabad Metro, and L&T Infrastructure Development Projects Limited (L&T IDPL), the subsidiary having road projects and power transmission lines, the company said in a statement on August 31, 2021. The proposed sale comes in the backdrop of a growing focus on environment, sustainability and governance. "We have already identified our non-core assets in Nabha Power, a 2x700 MW supercritical thermal power plant at Rajpura, Punjab, L&T Infrastructure Development Projects Ltd. (L&T IDPL), our subsidiary primarily engaged in road projects and power transmission lines and Hyderabad Metro, the largest Public-Private Partnership (PPP) project in the Metro rail sector for divestment. We will work out the divestment process of all these assets over a period of time," DK Sen, Whole-Time Director and Senior Executive Vice President (development projects), L&T, said in the statement. "Nabha Power supplies power to the state of Punjab at one of the cheapest variable costs of INR 2.93 per unit among Integrated Power Producers (IPPs) in Punjab, despite being located 1,500 Kms away from the mine source," L&T said in a separate statement. "This deal is in line with the company's strategy to pursue the divestment path for all non-core assets in its portfolio," the L&T statement added.
Larsen & Toubro Limited is a diversified group. Net sales (not including sold divisions) break down by activity as follows:
- engineering and construction services (68.5%): implementation of turnkey projects of transportation, building, factories, engineering instruments, etc.;
- construction, installation and implementation of hydrocarbon exploration and production projects (17.2%);
- development of thermal power plants and manufacturing of energy production equipment (4.4%);
- manufacturing of aerospace and defense equipment and systems (3.2%);
- manufacturing of custom designed equipment and systems for core industries (2.7%): equipment and systems for the fertilizer, refining, petrochemical, chemical, oil and gas, thermal and nuclear energy industries;
- other (4%): manufacturing of industrial machines and products (industrial valves, welding machines, building equipment, etc.), production of concrete, real estate development, etc.
Net sales are distributed geographically as follows: India (80.1%), Saudi Arabia (3.6%), United Arab Emirates (2.2%), Qatar (2.1%), Kuwait (1.6%) and other (10.4%).