In a move aimed at boosting growth, engineering and construction major Larsen & Toubro (L&T) on Monday said it has initiated a restructuring process that will result in nine business verticals being empowered as independent companies, in addition to five existing subsidiaries.
"We have commenced the process of restructuring of these nine operating units which will act like independent companies going forward," L&T President and Board Member J P Nayak said.
The company took the help of an external agency for the restructuring process, he said without giving the name. L&T has a sprawling and complex web of 64 businesses, ranging from power to roads and aerospace to switchgear.
L&T's power, hydrocarbon, machinery & product, switchgear, heavy engineering, infrastructure, building & factories, metals & minerals and electrical businesses will make up the nine independent companies (ICs).
"We see major growth opportunities in all the sectors we are present in. We are trying to be organised for this to maintain our growth in future," Nayak said.
Each of these nine ICs will have a full-fledged Chairman and CEO as head of the organisation and manage its own profit and loss account. Each will even have its own Board of Directors with at least three independent directors.
Nayak said L&T has already appointed Chief Executives for its ICs and will induct new directors for the business units within two months. .
The restructuring will help the businesses make faster decisions and make the process autonomous, Nayak said. "The units will grow as fast as they are capable of with entrepreneurial skills."
The performance of these companies will also improve due to focus, empowerment, transparency, stronger leadership and improved competitiveness of each business and create a stronger leadership pipeline along with enhancing stakeholder value, Nayak added.
He also said the Group's subsidiary, L&T Finance, has received all required permissions and is awaiting for the right opportunity to list its shares.
The company's other subsidiaries - L&T Infotech, L&T Infrastructure Development Projects Ltd (L&T IDPL) and L&T Hyderabad Metro Rail Pvt Ltd - will tap the capital market as and when they require funds, Nayak said.
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