L&T Finance Holdings' merger to pare costs, free up Rs 3,000-cr funds
liquidity that can be deployed to lend to high-yielding assets. The merger will consolidate lending companies L&T Finance, L&T Infra Credit and asset manager L&T Mutual Fund Trustee into LTFH.
The company will also apply for a change of name to L&T Finance to the Reserve Bank of India (RBI), the brand name that it is known in the market, chief financial officer (CFO) Sachinn Joshi said.
«This consolidation brings down our operating costs, frees up management bandwidth which was engaged for a few days every month on different committee and board meetings. It also frees up ₹3,000 crore from our former infrastructure debt fund L&T Infra Credit which was deployed in liquid assets like government securities.
These funds which are now yielding 6.5-7% will now give us 15% yields when it is used for retail lending,» Joshi said.
Better utilisation of liquidity and lower operating costs could improve the company's return on assets (RoA) towards 3.5% from 3.4% currently. The company's return on equity (RoE) ratio will also increase to five from 3.4 as the company completes running down its wholesale book.
«Retail loans now constitute 88% of our book higher than the 80% target we had set for the end of fiscal 2026. We could end up with 90-95% retail loans as we have already stopped disbursing loans to infrastructure and real estate,» Joshi said.
The merger will also help in complying with Reserve Bank of India regulations, LTFH said. All regulatory and statutory approvals for the mergers are in place, the company said.
CEO Dinanath Dubhashi said the merger is a completion of a process which started seven years and has seen the reduction of the number of NBFCs from eight to a single entity.
«With the merger, we believe we will
