When asked about the company’s IPO plans, L&T Chairman A M Naik said: “L&T Technology Services listing will happen in some time. Together, both the technology subsidiaries have revenues of $1.5 billion. We have not made up our mind on the timeline of L&T Technology Services IPO. We want to digest one IPO at a time. It took five-and-a-half years after the listing of L&T Finance and now when we are listing the Infotech business. All I can say is, it won’t take another five-and-a-half years.”
The L&T Infotech IPO opened on July 11 and the price band was fixed at Rs 705-710.
According to sources, L&T Technology Services’ revenues stood at $470 million for FY16 and the company is targeting $525 million in FY17. The bankers working on the IPO include Kotak Mahindra, Bank of America and Merrill Lynch, and JM Finance.
“The promoters want to first list the IT services business and then look at this company," said another source.
Earlier this year, the company strengthened its management team by making Keshab Panda as CEO and managing director and inducted Kumar Prabhas, chief operating officer, to the board as executive director. Panda, who joined L&T in 2009 from Tech Mahindra (formerly Mahindra Satyam), as head of Americas, was until recently heading L&T Technology as chief executive.
Apart from this, the company has expanded its board of directors by inducting former L&T Infotech CEO Sudip Banerjee as an independent director. L&T Technology Services owes its origin to parent L&T, which in 2010 transferred its integrated engineering services business to the former. This was followed by the transfer of the telecom and high-tech product engineering services business from L&T Infotech to L&T Technology Services in January 2014.
“L&T Technology Services was always a part of L&T. Out of $500 million revenues, $85 million was sitting in L&T Infotech, which was bought over by L&T Technology Services at a fair value in 2014,” said Naik. In the recent past, the engineering services space in India has seen consolidation. HCL Technologies acquired Mumbai-based Geometric recently. Earlier this year, QuEST Global Services saw Bain Capital, GIC and Advent International invest $350 million in the company, valuing it at $1 billion.