Engineering giant Larsen & Toubro (L&T) has exited city-based Salzer Electronics with more than three-fold gain. L&T, which had invested about` ` 25 crore in Salzer nearly seven years ago, has sold its entire stake in the company for around ` 7580 crore.
The divestment process was concluded last week. L&T got 26.06% stake when Salzer Electronics merged Salzer Cables, an unlisted firm where the engineering behemoth had a 49% stake, with itself.L&T, which bought the stake for around ` 90 per share, sold nearly 26.8 lakh shares in a series of transactions, for about ` 300 per share, sources said.
The Salzer scrip, which hit a 52-week high of ` 364 on July 23, gained 2.5% at close on the BSE on Thursday in a flat market. L&T decided to exit Salzer following a new set of norms by market regulator SEBI that stipulated that companies having 26% or more stake in other firms had to attach their balance sheets as part of their disclosures, sources said.
This meant that L&T had to attach the balance sheet of Salzer on a regular basis, they said. L&T however will continue to have collaboration with Salzer.
“They (L&T) continue to extend support in marketing, manufacturing technology and new product development,“ said R Doraiswamy , MD, Salzer Electronics.
“Our exit from Salzer is a part of regular treasury transaction. We shall continue with our business relationship as usual,“ said S C Bhargava, senior vice president and head, L&T Electrical & Automation. L&T's business relationship with Salzer started in 1993 for marketing, sales and distribution of rotary switches and cable ducts.
