Appoints L&T CEO S N Subrahmanyan as chairman; Shailesh Haribhakti to remain independent director
Abhijit Lele |
Last Updated at March 1, 2022 02:11 IST
As part of a business rehaul, L&T Finance Holdings (LTFH), a subsidiary of engineering major Larsen and Toubro Ltd (L&T), will focus only on retail finance and exit wholesale and realty funding business within the next two years.
S N Subrahmanyan, chief executive and managing director, L&T has been appointed as chairperson of the finance company. He replaces Shailesh Haribhakti, who would continue to be independent director on the board of the company. This is in line with L&T’s overall commitment to strengthen its presence in the services area.
A M Naik, chairman L&T said shareholders of L&T have not been happy about the performance of the finance company. The decision to appoint S N Subrahmanyan and reshaping strategy will virtually change the character and structure of L&T Finance Holdings Ltd. The current chief executive Dinanath Dubhashi will continue to lead the finance company as CEO.
The decision to exit wholesale lending and real estate finance is driven by difficulties experienced in repayments by borrowers, Naik said.
LTFH has established itself as a strong and well-capitalised financial institution. It has a strong presence in farm equipment finance, two-wheeler finance, as well as micro loans. It continues to be one of the leading players in financing infrastructure sectors like renewables and roads.
Shankar Raman, chief financial officer, L&T said the finance company will not require fresh capital as capital adequacy ratio is about 23 per cent. While the overall loan book is about Rs one trillion, the retail portion will be about Rs 50,000 crore. There is potential to double the retail portfolio in four years.
Elaborating on the roadmap, Subrahmanyan said LTFH portfolio will shrink first as it exists wholesale and real estate exposures and then scale up size. The finance company is embarking on a new journey towards Vision 2026.
Given the thrust being provided by L&T Group for the services businesses in its overall portfolio, growth of L&T Financial Services is an important component of the Group’s Lakshya 2026 Strategic Plans, he added.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.