L&T Finance shares jumps as stake-sale to Warburg Pincus gets traction

L&T Finance, am arm of construction major Larsen & Tubro (L&T) jumped to a day's high of Rs 72.75 per share on the Bombay Stock Exchange's (BSE) Sensex after reports of the company selling 25% stake to Warburg Pincus emerged. 

According to a report in the Economic Times, L&T Finance Holdings is in talks with the American private equity firm Warburg Pincus to sell as much as 25% stake. The paper quoted a source saying that two have agreed on the sale and are now negotiating on the valuation. 

The company has a free float market capitalisation of naerly Rs 3700 crore as on Tuesday morning. 

The share price of L&T Finance was trading at Rs 71.65 at 11.22 am, up by nearly 8% on the Sensex. 

Similar story unraveled on the National Stock Exchange's Nifty where the stock shot up 7.83% at the given time. 

The paper quoted the source as saying that L&T is looking at a valuation of Rs 83 per share for the stake-sale translating to a deal size of Rs 3,574 crore. 

L&T Finance did not comment specifically on the deal but said that the company meets investors from time to time. 

Warburg Pincus, too, did not comment on the deal. 

The paper said that L%T Finance will use the money to expand its business and finance more commercial vehicles and construction equipment.