Larsen & Toubro (L&T) has announced the withdrawal of the draft prospectus filed by its subsidiary L&T Infotech for an initial public offering (IPO).
The decision was taken due to change in offer structure and other considerations, the company said in a stock exchange filing on Monday. Sources told FE that the company will reduce the issue size and refile the prospectus with the Securities & Exchange Board of India (Sebi).
The company had filed its draft prospectus with the markets regulator on September 28, 2015 to raise close to Rs 2,000 crore. The prospectus was subsequently approved by Sebi on December 31, 2015.
“The valuations of the company were very expensive and don’t suit the current market conditions. Hence, we wanted to reduce the issue size by more than 20% and revise the price band accordingly. Hence we have withdrawn the existing prospectus,” said an investment banker, who is part of book running managers for the IPO.
As per the Sebi’s Issue of Capital and Disclosure Requirements (ICDR) regulations, if there is any major change in the offer structure of an IPO, the issuer needs to withdraw the current prospectus and file a fresh draft red herring prospectus (DRHP) with Sebi for approval.
The company planned to sell about 1.7 crore shares through the primary market offering for which Citi, Kotak Investment Banking, Barclays and ICICI Securities were the book running lead managers, DRHP data showed.
