L&T Restructures Real Estate Business with 6.3k Crore Transfer to Subsidiary
Mumbai: Larsen & Toubro (L&T) has announced a significant restructuring move, transferring its real estate business to L&T Realty Properties, a wholly-owned subsidiary of the company. The deal, valued at Rs 6,297 crore, was approved at a board meeting held in Muscat, Oman. This strategic decision is part of L&T's broader efforts to streamline its operations and focus on its core competencies.
The real estate business of L&T generated revenue of Rs 641 crore during the first half of FY26, contributing a modest 0.93% to the company's standalone revenues. In a regulatory filing, L&T detailed that L&T Realty Properties will issue 393.53 lakh shares with a face value of Rs 10 each at a premium of Rs 6 each to the parent company. This results in a total deal value of Rs 6,297 crore.
The consideration for the transfer will be based on an arm's length basis, as determined by a valuation report from SSPA & Co, a chartered accountant firm, and a fairness opinion on the valuation report issued by Inga Ventures, an investment banking firm. This ensures transparency and fairness in the transaction.
L&T Realty Properties, the subsidiary that will now house the real estate business, had revenues of Rs 202 crore in the first half of FY26. This transfer is expected to enhance the operational efficiency and financial performance of both L&T and L&T Realty Properties.
The move reflects L&T's commitment to optimizing its business portfolio and focusing on high-growth areas. By separating its real estate segment into a dedicated subsidiary, L&T aims to create a more focused and specialized entity that can better address the unique challenges and opportunities in the real estate market. This restructuring is also expected to improve governance and accountability within the real estate division.
L&T is one of India's largest engineering and construction companies, known for its vast portfolio of projects across various sectors, including infrastructure, power, and manufacturing. The company has been proactive in adapting to market changes and has undertaken several restructuring initiatives in recent years to stay competitive and drive sustainable growth.
The transfer of the real estate business to L&T Realty Properties is a strategic step that aligns with the company's long-term vision. It is expected to create value for shareholders and stakeholders by enhancing the overall performance and profitability of the L&T group. The real estate sector in India continues to be a crucial component of the economy, and L&T's dedicated focus on this segment through a specialized subsidiary is a positive development for the industry.
In conclusion, the Rs 6,297 crore transfer of L&T's real estate business to L&T Realty Properties is a significant move that underscores the company's commitment to operational excellence and strategic growth. This restructuring is expected to position both entities for greater success in their respective markets.
