L&T starts process to take its engg services subsidiary public

After its information technology (IT) services business, engineering and construction major Larsen & Toubro (L&T) has set the ball rolling to take its fully-owned subsidiary L&T Technology Services public, by elevating its chief executive and expanding its board of directors.

L&T Technology Services, which provides engineering and R&D services to global corporates in diverse sectors, such as aerospace and defence, has elevated its Chief Executive Keshab Panda as the CEO & MD apart from inducting Kumar Prabhas, its chief operating officer (COO) to the board as an executive director. Panda who joined L&T in 2009 from Tech Mahindra (formerly Mahindra Satyam) as Head of Americas, was until recently heading L&D Technology as the Chief Executive.

Apart from this, the company has also expanded its board of directors by inducting former L&T Infotech CEO Sudip Banerjee as an independent director. Banerjee, also a former Wipro president who was heading L&T Infotech, L&T's wholly-owned IT services subsidiary between September 2008 and May 2011, is also in the board of Kesoram Industries and IFB Industries as an independent director.

"The process has just started to take L&T Technology Services Public which the board is expecting to happen sometime during this calendar year," a senior source in the company said. "While we are already the number one pure-play engineering services company, the company has decided to rapidly strengthen its position in areas like digital and Internet of Things (IoT)," the person added.

In reply to a query by Business Standard, the company confirmed the appointments though it declined to comment about the proposed initial public offering (IPO) plans."We confirm that Dr Keshab Panda has been elevated as CEO and MD, and he will continue to lead the company into new growth areas. We also confirm Kumar Prabhas who joined us last November as our COO, has been inducted to the L&T Technology Services' Board," the company said in a statement.

"Also, Sudip Banerjee has joined our Board as an Independent Director. Under the expanded leadership, L&T Technology Services will continue to grow its offerings of engineering services across the globe. We will not respond to any speculation on an IPO," the company added.

Ahead of its IPO plans, sources said, the company has been strengthening its top leadership team as well. As a part of this Prabhas, who was earlier heading Unisys India as Managing Director and VP & GM for End User & Workspace Services, joined L&T Technology Services as COO in November last year. Similarly, Paneesh Rao who was previously heading Human Resources (HR) at Atos India, had joined the company has Head of HR in June last year.

L&T Technology Services owes its origin to parent L&T which in 2010 transferred its Integrated Engineering services (IES) business to the former. This was followed by the transfer of the telecom and high-tech product engineering services business from L&T Infotech to L&T Technology Services in January 2014 as a part of which around 1800 engineers were transferred. The company which has been growing at a CAGR of around 37 per cent is estimated to have a revenue of around $500 million last year.

In January this year, L&T Infotech, a subsidiary of L&T, has received market regulator Sebi's approval to float an initial public offering worth Rs 2,000 crore.