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					                                                       IPO Analysis
                                                                               PF / IPON / 24072011 / 722

Issue r
      Highlights:                                        About the Issuer
Issuer: L&T Finance Holdings Ltd.
                                                          Brief Introduction:
Issue Open: July 27 2011
Issue Close: July 29 2011                                 The Company was incorporated in 2008; L&T Finance
                                                          Holdings is a financial holding company offering a diverse
Issue Type: 100% Book built Issue IPO
                                                          range of financial products and services across the
Issue Size (Rs): 1,245.00 Crore                           corporate, retail and infrastructure finance sectors as well as
Public Issue of: 211,016,949 Equity Shares -              mutual fund products and investment management services.
244,117,647 Equity Shares                                 Promoted by Larsen & Toubro Ltd, one of the leading
Price Band: Rs 51–Rs 59 per Equity Share                  companies in India, with interests in engineering,
Face Value: Rs.10                                         construction, electrical and electronics manufacturing and
                                                          services, information technology and financial services, L&T
Bid Size: 100 Shares
                                                          Finance Holdings is registered with the RBI as a
Listing: NSE &BSE                                         Systemically Important Non-Deposit Taking Non-Banking
                                                          Financial Company and has applied for registration as a Core
IPO Grade:                                                Investment Company.
CARE IPO GRADE” 5”
                                                          Investment Rationale:
(Indicating” Strong fundamentals”)
                                                          The operations are arranged into four business groups,
                                                          being the Infrastructure Finance Group, the Retail Finance
Issue Allocation:
                                                          Group, the Corporate Finance Group and the Investment
Employees & Share holders: 2, 88, 13,559 Equity           Management Group. As on March 31, 2011, on a
shares                                                    consolidated basis, we had total gross loans and advances
QIB (Shares): 91,101,695 Equity Shares                    outstanding of Rs 179,431.77 million, and for Fiscal Year
Non Institutional (Shares): 27,330,508 Equity             2011, they made total disbursements of Rs 243,415.11
Shares                                                    million across our Infrastructure Finance Group, Corporate
Retail (Shares):63,771,186 Equity Shares                  Finance Group and Retail Finance Group.

                                                          Key Strategies:
Share Holding Pattern:
                     Pre Issue         Post Issue            a) Continue to expand the business to include new
                                                                products and services, as well as entirely new lines
 Equity          1,477,024,426        1,68,80,41,375            of business.
 Shares                               -
 outstanding                                                 b) Increase the market penetration of their existing
                                      1,72,11,42,073            products and services
                                                             c) Continue to focus on two key Indian growth stories:
                                                                infrastructure and rural development
BRLMs:                                                       d) Develop their financial products distribution business
Citigroup Global Markets India Private Ltd                      segment.
                                                             e) Continue to attract and retain talented professionals
HSBC Securities & Capital Markets Pvt Ltd.                   f) Continue to focus on the growth of their retail loan
                                                                portfolio
JM Financial Consultants Pvt Ltd.
                                                          Key Strengths:
Registrar:                                                   a) Diversified and balanced mix of high growth
Sharepro Services Pvt Ltd.
                                                                businesses.
Bankers to the Issue:                                        b) Strong distribution network, with a presence
Axis Bank Ltd, DBS Bank Ltd                                     throughout India
                                                             c) Experienced management team and employees
City Union Bank Ltd, Dhanlaxmi Bank Ltd.                        with a proven track record of establishing and
                                                                growing new lines of business
The Federal Bank Ltd, Citibank N.A.
                                                             d) High quality loan portfolio comprising the funding of
The Hongkong & Shanghai Banking Corporation Ltd.                mainly income-generating assets and activities.
                                                             e) Good financial and capital position, as well as access
ICICI Bank Ltd, IDBI Bank Ltd                                   to multiple sources of capital
                                                             f) Strong parentage and brand equity of L&T.
State Bank of India, HDFC Bank Ltd




Call us at 1800 425 8282                               L&T Finance Holdings Ltd.                                      1
                           IPO Analysis
                                                     PF / IPON / 24072011 / 722


                            Financial Analysis:

                            Net Income:

                            Revenue of the company increased from 0.026 Crores in
                            2009 to 2114.843 Crores in 2011 at a CAGR of 284%.

                            Operating Profit:

                            Operating profit of the company increased from -0.016
                            Crores in 2009 to 611.6 Crores in 2011.

                            Net Profit:

                            Net profit of the company increased from -0.017 Crores in
                            2009 to 392.572 Crores in 2011.

                            Objects of the Issue:
                            The objects of the issue are as below

                                a.   Repayment of inter corporate deposit issued by
                                     Promoter to the Company.
                                b.   To augment the capital base of L&T Finance and L&T
                                     Infra, to meet the capital adequacy requirements to
                                     support the future growth in their business
                                c.   To achieve the benefits of listing on the Stock
                                     Exchanges
                                d.   For   other   general   corporate   purposes   including
                                     meeting the expenses of the Issue.

                            Peer Comparison
                            Company            Face      EPS      P/E     Book         RONW
                            name               Value                      value per    (%)
                                                                          share
                            Shriram            10        53.92    12.1    216.37       24.87
                            Transport
                            Finance
                            Company Ltd.
                            Mahindra &         10        50.92    12.3    244.70       19.36
                            Mahindra
                            Financial
                            Services
                            IDFC               10        8.77     15.4    76.97        11.39
                            Rural              10        26.18    7.6     129.90       20.15
                            Electrification
                            Corporation
                            Power Finance      10        23.06    8.3     132.79       17.37
                            Corporation
                            Sundaram           10        70.01    7.7     325.22       21.53
                            Finance
                            L&T Finance        10        2.87     -       20.40        13.58
                            Holdings Ltd



Call us at 1800 425 8282   L&T Finance Holdings Ltd.                                       2
                                                   IPO Analysis
                                                                           PF / IPON / 24072011 / 722


STATEMENT OF RESTATED AUDITED PROFIT AND LOSS ACCOUNT                                        (Rs in Crores)
Particulars                                                   For the year ended March 31,
                                                              2011            2010              2009
Income
Income from operations                                        2086.376        1405.596          -
Other income                                                  28.467          18.319            0.026
Total                                                         2114.843        1423.915          0.026
Expenditure
Employee cost                                                 96.238          59.681            -
Administration and other expenses                             216.324         1,50.419          0.003
Provisions and contingencies                                  110.918         94.861            -
Interest and other finance charges                            1020.655        674.708           -
Depreciation and amortisation                                 54.210          47.545            -
Amortisation of goodwill                                      4.898           2.479             -
Preliminary expenses written off                              -               0.052             0.039
Total                                                         1503.243        1029.745          0.042
Net profit before tax, before exceptional item, prior
period item & subsidiaries/associates effect                  611.600         394.170           (0.016)
Current tax (including wealth tax)                            (228.642)       (15.2341)         (0.001)
Deferred tax                                                  15.340          18.250            -
Provision for fringe benefit tax (prior period)               0.001           (0.004)           -
Net profit after tax before exceptional item, prior
period item & subsidiaries/associates effect                  398.299         260.075           (0.017)
Profit /(Loss) on sale of subsidiaries / associate share of
profit/(loss)                                                 (1.135)         1.621             -
Net profit after tax and subsidiaries/associate effects &
before exceptional items and prior period items               397.164         261.696           (0.017)
Exceptional items                                             (5.995)         (1.541)           -
Prior period items (Income tax of earlier years)              -               (0.508)           -
Net Profit after extra-ordinary items                         391.169         259.647           (0.017)
Adjustments, if any (Changes in accounting policy)            2.100           4.322             -
Tax impact on adjustments                                     (0.697)         (0.961)           -
Total adjustments, net of tax impact                          1.403           3.361             -
Net Profit, as Restated                                       392.572         263.008           (0.017)
Balance brought forward from previous year                    100.437         (1.819)           -
                                                              493.009         261.189           (0.017)
Appropriations
Transfer to Reserve u/s 45-IC of RBI
Act, 1934                                                     86.530          54.672            -
Transfer to Reserve under Section 36(l)(viii) of the
Income Tax Act, 1961                                          11.650          6.080             -
Transfer to Debenture Redemption Reserve                      2,20.000        100.000           -
Share in opening profit / (loss) of Associate                 -               -                 (1.802)
Balance carried to Balance Sheet                              174.829         100.437           (1.819)




Call us at 1800 425 8282                            L&T Finance Holdings Ltd.                             3
                                                                    IPO Analysis
                                                                                                        PF / IPON / 24072011 / 722


STATEMENT OF RESTATED AUDITED ASSETS AND LIABILITIES                                                                             (Rs in Crores)

      Particulars                                                                      As at March 31,
                                                                                       2011          2010                    2009
A     Assets
      Fixed Assets - Gross block                                                       995.480              937.852          740.426
      Less : Depreciation                                                              324.362              304.480          273.072
      Net Block                                                                        671.118              633.372          467.354
      Less : Lease adjustment                                                          236.289              236.289          236.289
      Net Block after lease adjustment                                                 434.829              397.083          231.065
      Capital Work-in-progress including capital advances                              18.036               1.370            12.009
                                                                                       452.865              398.453          243.074
B     Goodwill (on consolidation)                                                      41.601               46.498           16.747
C     Investments                                                                      732.418              308.760          169.022
D     Deferred Tax Assets (net)                                                        5.666                -                -
E     Loans & Advances towards financing activities                                    17411.232            10949.087        7098.432
F     Current     Assets,    Loans and
      Advances
      Sundry Debtors                                                                   367.159              388.833          179.518
      Cash and Bank Balances                                                           163.465              116.895          72.108
      Loans and Advances                                                               439.442              193.471          180.9.15
      Other Current Assets                                                             120.404              63.818           41.604
                                                                                       1090.470             763.017          474.145
G     Liabilities and Provisions
      Secured Loans                                                                    13177.776            7446.762         4154.781
      Unsecured Loans                                                                  2738.690             2280.581         2065.463
      Deferred Tax Liabilities (net)                                                   -                    8.976            25.758
      Current Liabilities                                                              725.317              290.667          179.121
      Provisions                                                                       201.912              92.191           42.667
                                                                                       16843.695            10119.177        6467.790
H     Net Worth (A+B+C+D+E+F-G)                                                        2890.557             2346.638         1533.630
      Represented by
      Shareholders’ funds
      Share Capital                                                                    1417.024             1353.592         2.050
      Share application money                                                          -                    275.000          1076.542
      Employee stock options
      outstanding                                                                      1.226                -                -
      Reserves and Surplus                                                             1472.307             718.046          455.038
      Less : Revaluation Reserve                                                       -                    -                -
      Reserves (net of Revaluation Reserve)                                            1472.307             718.046          455.038
      Net Worth                                                                        2890.557             2346.638         1533.630



     IMPORTANT: Please read the Red Herring Prospectus of this issue carefully before investing in the same.
    Disclaimer
                                                                                                                  : Research     Team:
    The information and views presented in this report are prepared by Karvy Stock Broking Limited. The
    information contained herein is based on our analysis and upon sources that we consider reliable. We,   Shivram Yedithi
    however, do not vouch for the accuracy or the completeness thereof. This material is for personal       E-mail: shivram.y@karvy.com
    information and we are not responsible for any loss incurred based upon it. The investments discussed
    or recommended in this report may not be suitable for all investors. Investors must make their own      Neelima Bajaj
    investment decisions based on their specific investment objectives and financial position and using
                                                                                                            Santosh Rudrabhatla
    such independent advice, as they believe necessary. While acting upon any information or analysis
    mentioned in this report, investors may please note that neither Karvy nor Karvy Stock Broking nor      Direct Ph: 040 4467 7542
    any person connected with any associate companies of Karvy accepts any liability arising from the use
    of this information and views mentioned in this document.                                               Production: Raju A



Call us at 1800 425 8282                                              L&T Finance Holdings Ltd.                                              4

				
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