Motilal Oswal maintains Buy on L&T Finance Holdings
Source: IRIS | 27 Dec, 2021, 04.33PM
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| Rating: NAN / 5 stars. |
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 L&T Finance Holdings (LTFH) has entered into a definitive agreement with HSBC AMC, in which the latter will acquire 100% stake in L&T Investment Management (LTIM) for USD 425 million.
In addition, LTFH will also be entitled to excess cash (Rs 5-7 billion) in LTIM's books, resulting in a total sale consideration of Rs 37-39 billion (4.6-4.8% of current AUM).
Motilal Oswal Institutional Equities maintains ‘Buy’ rating on the stock with a target price of Rs 110 (1.2x Sep'23E consolidated BVPS).
"LTFH will utilize the proceeds primarily for risk capital and only a small portion for growth capital. A part of the gains from this transaction could also be paid out as dividends. Given its healthy capital adequacy of over 25% and expected proceeds from the sale of the MF business, LTFH is now in a position to aggressively push forward towards its stated long-term goal of retailization of its lending portfolio," it added.
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