In order to strengthen capacities at its growth centres, Larsen & Toubro (L&T), engineering and construction major, has decided to invest Rs 2,500 crore during the existing fiscal (2008-09).

The money will be spent in augmenting the existing facilities across all locations and for establishing a ship-building yard in Tamil Nadu.

On the sidelines of a seminar organised by Confederation of Indian Industries, in Kolkata on Friday, J P Nayak, member of the board and president (machinery and industrial products), L&T, announced that Rs 700-800 crore will be funded through debt, equity or a debt-equity mix during the second half of the financial year.

For ship-building, the company has earmarked about Rs 3,000 crore for the next few years.

The company registered a turnover of Rs 29,600 crore during the last fiscal (2007-08), and this year it anticipates a growth of 30% in sales.

Mr. Nayak also said that the company’s joint venture (JV) with Japan’s Mitsubishi Heavy Industries for making boilers and turbine generators would be operational within the next 12-18 months.

L&T holds the majority stake of 51% in the joint venture, while Mitsubishi control the remaining 49%.

Moreover, the company (L&T) will go ahead with the first of the three proposed initial public offers of its group companies in 2009-10.

Mr. Nayak also said that the listing will rely on market conditions, and that there would be an IPO every year for the other two companies.

The company is also the process of concluding deals with two realty developers to undertake construction projects.

“Both the projects will involve an investment of more than Rs 5,000 crore to be executed in five years,” Mr. Nayak said.

The shares of the
company, on Friday (May 30), closed at Rs 2,981.35, up 3.2% on the Bombay Stock
Exchange (BSE).