Last Updated on Feb 10, 2022 by Ayushi Mishra

L&T Finance is a well-known name in the Indian finance sector. However, it is neither a bank nor an NBFC, but a CIC core investment company (discussed later). L&T Finance Holdings Ltd is promoted by Larsen & Toubro Ltd, a leading company involved in construction, engineering, electrical and electronics, and other sectors.

It is the subsidiary of L&T Finance Holdings Ltd. Together with all its handful of subsidiary companies (mentioned later), L&T Finance Holdings offers a range of financial products and services across various sectors. This article discusses the history and journey of L&T Finance Ltd since its inception, the group structure, financials, and recent developments in the firm to help you analyse L&T finance share.

The article covers

Overview of L&T Finance Holdings Ltd

Board of Directors of L&T Finance

L&T Finance Holdings Ltd group structure

Business segments of L&T Finance

Products of L&T Finance

Peers of L&T Finance Holdings Ltd

L&T Finance share price

Last 4 yrs’ financials of L&T Finance Holdings Ltd

Q1 FY2021 earning results

The road ahead for L&T Finance Ltd

Rights issue of L&T Finance Holdings


Overview of L&T Finance Holdings Ltd

L&T Finance Ltd is registered as a CIC-ND-SI with the RBI. CIC means a systemically important core investment company. As per the apex bank, an NBFC is considered as CIC if it meets certain criteria including:

  • Its asset size is at least Rs 100 cr
  • It accepts public funds
  • At least 90% of its total assets are in the form of investments in equity, preference shares, loan, debentures or debt in group companies

You can read the other criteria for an NBFC to be a CIC here.

Journey of L&T Finance Ltd

  • 1994: L&T Finance Ltd was incorporated
  • 2007: L&T Infra Finance was established and VC Financing was commenced
  • 2008: Total assets of L&T Finance crossed Rs 10,000 cr and Microfinance & Loan Against Shares segment was launched
  • 2009: The company issued NCDs for the public
  • 2010: Ventured into mutual funds business and launched Infra Bonds
  • 2011: Total assets crossed Rs 20,000 cr and IPO of L&T Finance Holdings Ltd was issued
  • 2012: Total assets crossed Rs 30,000 cr. Further, L&T Finance acquired Fidelity’s MF business and IPHF’s Housing Finance business. The company also ventured into 2-wheeler financing by acquiring FamilyCredit
  • 2013: Issued preference shares
  • 2015: Total assets crossed Rs 50,000 cr. L&T Finance issued equity on a preferential basis as well as warrants to Bain Capital
  • 2017: Its stock reached an all-time high of Rs 200. The company commenced its micro loans business in Assam and was awarded the “Best Finance Company in Renewable Energy” at “Central Board of Irrigation & Power Awards”. The company also crossed an AUM of Rs 50,000 cr in mutual funds
  • 2018: Won “Management of Change & Excellence in HRM” in the CII National HR Circle Competition and the “Best Audit Committee” Award by the Asian Centre. ICRA upgraded the credit ratings of L&T Finance Holdings and its subsidiaries to AAA. The company was featured in the Forbes India’s Super 50 Companies 2018
  • 2019: CRISIL, ICRA, India Ratings, and CARE assigned/reaffirmed AAA rating of L&T Finance Holdings and its subsidiaries, despite multiple downgrades across the sector. The company publicly offered Secured NCDs with a base issue size of Rs 500 cr
  • 2020: Business Standard Social Excellence Awards 2019 recognises L&T Financial Services as the most Socially Aware Corporate of the Year

Business segments of L&T Finance

  • Rural
  • Housing
  • Wholesale
  • Mutual fund
  • Wealth management

Products of L&T Finance Ltd

  • Two Wheeler Finance
  • Housing Finance
    • Home Loan
    • Balance Transfer
    • Top Up Loan
    • Loan Against Property
    • Real Estate Finance
  • Mutual Fund
    • Equity Funds
    • Fixed Income Funds
    • Hybrid Funds
    • FMPs & Closed-ended Funds
    • Smart SIP Combos
    • Essentials SIP Combo
    • Market Cap SIP Combo
    • DIY SIP Combo
    • Exclusive SIP Combo
    • Balanced SIP Combo
  • Farm Equipment Finance
  • Micro Loans for Women
  • Infra Finance
    • Project Financing
    • Financial Advisory Services
    • Debt & Capital Markets
    • Corporate and Structured Finance
    • Infra Debt Fund

Group structure of L&T Finance Holdings Ltd

L&T Finance Ltd is the subsidiary of L&T Finance Holdings Ltd. Here’s the list of all the companies held by L&T Finance Holdings Ltd

  • L&T Finance
  • L&T Investment Management
  • L&T Housing Finance
  • L&T Infrastructure Finance Company
  • L&T Infra Debt Fund
  • L&T Financial Consultants
  • Larsen & Toubro Limited Holding Company
  • L&T Infrastructure Finance Company Limited
  • L&T Investment Management Limited
  • L&T Mutual Fund Trustee Limited
  • L&T Financial Consultants Limited
  • L&T Housing Finance Limited
  • L&T Capital Markets Limited Subsidiary Company (sold in 2020)
  • L&T Infra Investment Partners Advisory Private Limited
  • L&T Infra Investment Partners Trustee Private Limited
  • L&T Infra Debt Fund Limited
  • Mudit Cement Private Limited
  • L&T Capital Markets (Middle East) Limited

Board of Directors and key personnel of L&T Finance Ltd

  • Non-Executive Chairman: S. V. Haribhakti
  • Managing Director & Chief Executive Officer: Dinanath Dubhashi
  • Non-Executive Director: R. Shankar Raman
  • Independent Director: P. V. Bhide
  • Independent Director: Thomas Mathew T
  • Independent Director: Nishi Vasudeva
  • Independent Director: Rajani R. Gupte
  • Non-Executive Director: Prabhakar B.
  • Nominee Director: Pavninder Singh
  • Company Secretary: Apurva Rathod
  • Chief Executive of Rural Finance and Group Head of Digital, IT and Analytics: Mr. Sunil Prabhune
  • Chief Executive of Investment Management: Mr. Kailash Kulkarni
  • Group Chief Financial Officer: Mr. Sachinn Joshi
  • Chief Executive of Infrastructure Finance and Group Head of Special Situations Group: Mr. Raju Dodti
  • Chief Executive of Housing Finance and Group Head of Central Operations: Mr. Srikanth JR
  • Group Chief Risk Officer: Mr. Tushar Patankar
  • Chief Executive of L&T Infra Debt Fund: Mr. Shiva Rajaraman
  • Chief Digital Officer: Mr. Abhishek Sharma

Acquisitions by L&T Finance Ltd

L&T Finance acquired the following companies:

  • Fidelity’s MF business in India, IPHF, and FamilyCredit
  • L&T Investment Management Ltd, formerly known as DBS Cholamandalam Asset Management Ltd
  • L&T Mutual Fund Trustee Ltd, formerly known as DBS Cholamandalam Trustee Ltd

Peers of L&T Finance Holdings Ltd

Piramal Enterprises Ltd, Aditya Birla Capital Ltd, Motilal Oswal Financial Services Ltd are some of the peers of L&T Finance Ltd. Here’s an image comparing the valuation metrics of these stocks.

You can also see how L&T Finance Holdings compares with its peers based on technical and forecast metrics on ‘Peers’ tab of Bajaj Finance stock page on Tickertape.

Last 4 yrs’ financials of L&T Finance Ltd

Below are the Income Statement, Balance Sheet, and Cash Flow Statements of L&T Finance Holdings for the last 4 yrs.

Income Statement of L&T Finance

L&T Finance Holdings’ revenue, net income, and EBITDA have been consistently on the rise from FY2017 to FY2019. However, except for revenue, net income and EBITDA has seen a decline in FY2020. Even the growth in revenue has been marginal. One reason for this can be the impact of COVID-19 as the entire country was locked down in the last quarter of FY2020. However, when you dig into details, disbursements had taken quite a dent in the quarter before that.

Still, the L&T Finance share has generated higher revenue and net income compared to the industrial average over the last 5 yrs. But if you wish to do an in-depth analysis of L&T Finance Holdings Ltd, use the quarterly financials feature of Tickertape.

L&T Finance Holdings’ balance sheet for 4 yrs

Current ratio0.950.070.100.51
Debt-to-equity ratio6.866.556.766.34

The current ratio is a metric used to ascertain how well-positioned a company is to repay its current liabilities using its current assets. Though L&T Finance Ltd was able to bring down the ratio in 2018, the number started inching higher from the very next year. This signifies that L&T doesn’t have liquid assets in proportion with its current liabilities.

The debt-to-equity (D/E) ratio is a metric used to evaluate the extent to which a company’s operations are funded by debt compared to equity. A higher D/E ratio signifies that a company significantly funds its operations using debt, which makes it risky for investors. Further, it also means that, in the event of winding up of the company, the creditors will have a higher claim in the company’s assets than its shareholders. When you look at L&T Finance’s D/E ratio, it has been consistently on the higher side.

In fact, when compared to the 5-yrs’ industry average of the debt-to-equity ratio, L&T Finance Holding Ltd’s ratio has been higher. The same goes for the company’s current ratio, which has been lower than the industry average.

Cash flow statement of L&T Finance Holdings Ltd

Tickertape offers 9 yrs’ financial statements for every stock on NSE. Visit L&T Finance Holdings Ltd’s stock page to view the information for all the 9 yrs.

L&T Finance share price

Here’s a chart comparing L&T Finance share price movements with that of Piramal Enterprises and Aditya Birla Capital Ltd from 18th Sep 2019 to 11th Sep 2020. You can compare L&T Finance share price with any other stock you wish here.

Q1 FY2021 earnings results

It is no surprise that most businesses have reported slow growth in the Q1 FY2021 earnings report. Same goes for L&T Finance Holding Ltd’s profitability, which was impacted due to:

  • Incremental provisioning against the pandemic
  • Interest cost on maintaining enhanced liquidity
  • Lower fee income due to lower disbursal

Thankfully, the company’s strategic response to the ongoing pandemic and gradual reopening minimised the impact on its financial skeletal. Let’s look at some of its Q1 FY2021 numbers:

  • Net profit declined by 73%
  • Additional provisions of Rs 577 cr were created to tackle the impact of COVID-19
  • Portfolio under moratorium for its retail products reduced significantly to 44%
  • The company funded over 10,000 farm equipment, up by 19% y-o-y
  • Profit before tax fell by 86.63%
  • Advances reduced by 1% y-o-y to Rs 98,879 cr
  • Impairment on financial instruments rose to Rs 943.52 cr in Q1FY21
  • Loan book in rural business increased by 6% y-o-y
  • Asset quality improved; gross NPAs declined to 5.24% and net NPAs to 1.71%
  • Average assets under management of its investment management business fell by 20.22% y-o-y and stood at Rs 58,362 cr in Q1FY21
  • Assets under management for its equity and fixed income asset classes rose by 19% and 14% respectively, q-o-q. They stood at Rs 33,295 cr and Rs 12,442 cr respectively

During the quarter, L&T also received the $500 lakh as the 1st tranche of External Commercial Borrowings loan from the Asian Infrastructure Investment Bank

The road ahead for L&T Finance Ltd

Talking about what the near-term future looks like for L&T Finance, its MD & CEO Dinanath Dubhashi said that the company expects to see a spike in retail disbursements in Q2 FY2021. He also reassured shareholders that L&T Finance is in a good position to recover from the impact of the pandemic and would get back to the pre-COVID levels quicker than anticipated courtesy of:

  • A resilient business model
  • Sufficient liquidity
  • Significant provisions and
  • Stringent risk controls

The MD also sees the revival of the rural economy propelling L&T Finance Holdings’ growth. However, two of its business segments namely real estate and infrastructure may see slower growth due to the impact of the pandemic.

L&T Finance Holdings rights issue

To further strengthen its capital as a protective measure against a reeling economy, L&T Finance is now planning a rights issue worth Rs 3,367 cr. Apparently, the unsold shares in this issue would be bought by its parent company L&T Ltd. However, neither the issue size nor the terms of the fundraising events are finalised as yet.


While we have discussed important pointers to evaluate L&T Finance share, it is best you do a self-analysis of L&T Finance Holdings Ltd before making a buying or selling decision.

Aradhana Gotur
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