L&T Finance shares up 6% on talks co may sell 25% stake to Warburg Pincus

Shares of L&T Finance Holdings emerged as the second-best performer in the BSE mid-cap space in early trade Tuesday, surging nearly 6 percent to a high of Rs 70.15 on a media report that American private equity fund Warburg Pincus may acquire 25 percent stake in the financial services arm of L&T. L&T Finance has set a price of Rs 83 a share, up 18 percent over the current intra-day high share price level. [caption id=“attachment_2330484” align=“alignleft” width=“380”] A M Naik - chairman, L&T[/caption] As per the proposed deal, L&T Finance plans to issue fresh shares to Warburg and utilise the funds to shore up the capital base to expand its business of financing trucks, commercial vehicles and construction equipment, an Economic Times report said. In 2014-15, the company reported a 24 percent year-on-year growth in total income to Rs 6,481 crore on net profit of Rs 851 crore, up 43 percent. Currently, the engineering and constructions firm L&T owns 72.95% in the financial services firm. At 9.35 am, L&T Finance Holdings stock was quoted at Rs 69.10, up 4 percent from the previous close. Nearly 8 lakh shares changed hands on the BSE so far, against two-week average volume of 6.66 lakh shares. The stock is inching towards its 52-week high of Rs 76.95, just 11 percent short taking into account the current level.