In Focus: Here’s Why L&T Finance Tumbled Almost 7% on Friday

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In Focus: Here’s Why L&T Finance Tumbled Almost 7% on Friday
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the leading NBFC company L&T (NS: LART ) Finance Holdings Ltd (NS: LTFH ) tumbled 6.66% to end Friday’s session at Rs 77.1 apiece, after falling 7% in the session and hitting an intraday low of Rs 76.85/share.

The decline in the stock came after the company announced to sell its wholly-owned subsidiary, L&T Investment Management (LTIM) to the asset management arm of HSBC, Hsbc Asset Management , on Thursday.

In this deal, HSBC AMC will acquire 100% shares of LTIM for $425 million, roughly Rs 3,192 crore. LTIM is the investment manager of the company’s mutual funds arm L&T Mutual Fund and among the top 15 mutual fund houses in India.

The investors evidently did not take the selling announcement of LTIM positively.

Through the acquisition, HSBC aims to expand its presence and unlock value in the growing Indian market, which will help the company strengthen its balance sheet. Until the acquisition is complete, LTIM and HSBC AMC will continue to serve their investors and counterparties.

Furthermore, HSBC Mutual Fund will appoint a board of its trustees as the trustee of all LTIM schemes, while some of the latter’s schemes will be merged with HSBC’s.

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  • Devendra Raikwar @Devendra Raikwar
    hold
    Like 0
  • Devendra Raikwar @Devendra Raikwar
    hold
    Like 0
  • MOSTAFA AJJOUJ @MOSTAFA AJJOUJ
    AJJOUJ MOSTAFA VENDRE OUI OKY
    Like 1
  • Milin Shah @Milin Shah
    The profitable business is sold... Now what's the point in investing in L&TFH.. There are better small finance companies are available at attractive valuation.. Company will use the amount to pay the debt.. previously it gather the fund using right issue.. Price can move at either direction.. but as per me investors should look for other options..
    Like 10
    • Cutiepie Kittuu @Cutiepie Kittuu
      agree
      Like 0
    • Pradyut Roy @Pradyut Roy
      Absolutely it will go down to 60 for sure
      Like 1
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

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      100
  • Naresh kumar @Naresh kumar
    hold
    Like 1
  • mayan saxena @mayan saxena
    Should investors hold it or exit?
    Like 0
    • Ravi dhingra @Ravi dhingra
      exit
      Like 0
    • Ravi dhingra @Ravi dhingra
      exit
      Like 0
    • Ramtenki Pranith @Ramtenki Pranith
      buy it
      Like 1
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      100

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