Larsen & Toubro
|Traded as||NSE: LT
BSE SENSEX Constituent
|Founded||Bombay, Bombay Presidency, British India (1938 )|
|Headquarters||L&T House, N.M. Marg, Ballard Estate, Mumbai, Maharashtra, India|
|Revenue||₹110,011.69 crore (US$17 billion) (2017)|
|Profit||₹5,537.99 crore (US$860 million) (2016)|
|Total assets||₹227,524.72 crore (US$35 billion) (2016)|
Number of employees
|84,027 (March 2014)|
|Divisions||Real Estate(Realty), Technology, Engineering, Construction, Manufacturing|
|Subsidiaries||L&T Technology Services, L&T Infotech, L&T Mutual Fund, L&T Infrastructure Finance Company, L&T Finance Holdings, L&T MHPS|
Larsen & Toubro Limited, commonly known as L&T, is an Indian multi-national conglomerate headquartered in Mumbai. It was founded by two Danish engineers taking refuge in India. The company has business interests in engineering, construction, manufacturing goods, information technology, and financial services, and has offices worldwide.
- 1 History
- 2 Operating divisions
- 3 Major subsidiaries and joint ventures
- 4 Corporate re-structuring
- 5 Listing and shareholding
- 6 Employees
- 7 Awards and recognition
- 8 Allegations of bribery
- 9 See also
- 10 Gallery
- 11 References
- 12 External links
Larsen & Toubro originated from a company founded in 1938 in London by two Danish engineers, Henning Holck-Larsen and Søren Kristian Toubro. The company began as a representative of Danish manufacturers of dairy equipment. However, with the start of the Second World War in 1939 and the resulting restriction on imports, the partners started a small workshop to undertake jobs and provide service facilities. Germany's invasion of Denmark in 1940 stopped supplies of Danish products. The war-time need to repair and refit ships offered L&T an opportunity, and led to the formation of a new company, Hilda Ltd, to handle these operations. L&T also started to repair and fabricate ships signalling the expansion of the company. The sudden internment of German engineers in British India (due to suspicions caused by the Second World War), who were to put up a soda ash plant for the Tata's, gave L&T a chance to enter the field of installation.
In 1944, ECC was incorporated by the partners; the company at this time was focused on construction projects (Presently, ECC is the construction division of L&T). L&T began several foreign collaborations. By 1945, the company represented British manufacturers of equipment used to manufacture products such as hydrogenated oils, biscuits, soaps and glass. In 1945, the company signed an agreement with Caterpillar Tractor Company, USA, for marketing earth moving equipment. At the end of the war, large numbers of war-surplus Caterpillar equipment were available at attractive prices, but the finances required were beyond the capacity of the partners. This prompted them to raise additional equity capital, and on 7 February 1946, Larsen & Toubro Private Limited was incorporated.
After India's independence in 1947, L&T set up offices in Calcutta (now Kolkata), Madras (now Chennai) and New Delhi. In 1948, 55 acres of undeveloped marsh and jungle was acquired in Powai, Mumbai. A previously uninhabitable swamp subsequently became the site of its main manufacturing hub. In December 1950, L&T became a public company with a paid-up capital of ₹20 lakh (US$31,000). The sales turnover in that year was ₹1.09 crore (US$170,000). In 1956, a major part of the company's Mumbai office moved to ICI House in Ballard Estate, which would later be purchased by the company and renamed as L&T House, its present headquarters.
During the 1960s, ventures included UTMAL (set up in 1960), Audco India Limited (1961), Eutectic Welding Alloys (1962) and TENGL (1963).
L&T has formed a joint venture with SapuraCrest Petroleum Berhad, Malaysia for providing services to the offshore construction industry. The joint venture will own and operate the LTS 3000, a crane vessel for heavy lifting and pipe-laying.
L&T Power has set up an organisation focused on coal-based, gas-based and nuclear power projects. L&T has formed two joint ventures with Mitsubishi Heavy Industries, Japan to manufacture super critical boilers and steam turbine generators.
L&T is among the largest five fabrication companies in the world. L&T has a shipyard capable of constructing vessels of up to 150 metre long and displacement of 20,000 tons at its heavy engineering complex at Hazira, Gujarat. The shipyard constructs specialised heavy-lift ships, CNG carriers, chemical tankers, defence & para-military vessels, submarines and other role-specific vessels.
The design wing of L&T ECC is EDRC (Engineering Design and Research Centre), which provides consultancy, design and services. It carries out basic and detailed design for both residential and commercial projects.
LnT Realty is the real estate development arm of Larsen & Toubro. The company operates in Western and Southern India, constructing residential, corporate office, retail, leisure and entertainment properties with 35 million sq ft under various stages of development.
L&T Technology Services
L&T Technology Services, a subsidiary of Larsen & Toubro, is an engineering services company that operates in the global Engineering, Research and Development (“ER&D”) space. L&T Technology Services offers design, development and testing services for the industrial products, medical devices, transportation, aerospace, telecom and process industries. The company serves customers across the product engineering life cycle from product conceptualization to implementation. Services include consulting, design, development, testing, maintenance and to-market integration services.L&T Technology hits the Indian Capital Marets with its IPO offering 10.4 million share at a price band of Rs.850 to Rs.860
L&T Construction, a subsidiary of Larsen & Toubro, undertakes solar energy projects. In April 2012, L&T commissioned India's largest solar photovoltaic power plant (40 MWp) owned by Reliance Power at Jaisalmer, Rajasthan from concept to commissioning in 129 days. In 2011, L&T entered into a partnership with Sharp for EPC (engineering, procurement and construction) in megawatt solar project and plan to construct about 100 MW in the next 12 months in most of the metros. L&T Infra Finance, promoted by the parent L&T Ltd, is also active in the funding of solar projects in India.
Electrical and Automation
L&T is an international manufacturer of electrical and electronic products and systems. The company also manufactures custom-engineered switchboards for industrial sectors like power, refineries, petrochemicals and cement. In the electronic segment, L&T offers a range of metres and provides control and automation systems for industries.
Information Technology (IT)
Larsen & Toubro Infotech Limited, a wholly owned subsidiary of L&T, offers information technology, software and services with a focus on manufacturing, BFSI and communications and embedded systems. It also provides services for embedded intelligence and engineering .
Machinery and industrial products
L&T manufactures, markets and provides service support for construction and mining machinery, including surface miners, hydraulic excavators, aggregate crushers, loader backhoes and vibratory compactors; supplies rubber processing machinery and manufactures and markets industrial valves and allied products along with application-engineered welding alloys.
EWAC Alloys Limited
EWAC Alloys Limited is a wholly owned subsidiary of Larsen & Toubro, India. The company is engaged in design & development, manufacture and supply of special welding electrodes, gas brazing rods and fluxes, welding torches and accessories, atomised metal powder alloys, flux cored continuous wires & wire feeders, polymer compounds & wear-resistant plates.
Prof Wasserman, founder of Eutectic Castolin, and Henning Hock Larsen, founder of Larsen & Toubro, founded the Eutectic Division in India in the year 1962. Eutectic Castolin was later merged into the Messer Group of companies, Germany and referred as Messer Eutectic Castolin (MEC). In 2010, Larsen & Toubro Limited, bought the entire stake from Messer to become the wholly owned subsidiary of it. The current headquarters is in Ankleshwar, Gujarat (India), and the products are sold under the name EWAC.
Major subsidiaries and joint ventures
L&T has over 130 subsidiaries and 15 associate companies.
- L&T Kobelco Machinery Private Limited: this is a joint venture of L&T and Kobe Steel of Japan, to manufacture internal mixers and twin screw roller-head extruder's for the tyre industry. The company has a factory at Karai Village, Kanchipuram, that manufactures internal mixers and twin-screw roller head extruder's for the tyre industry, which commenced commercial operations on 1 December 2012.
- L&T – Construction Equipment Limited: having its registered office at Mumbai, India and focusing on construction equipment and mining equipment, L&T-Komatsu Limited was a joint-venture of Larsen and Toubro, and Komatsu Asia Pacific Pte Limited, Singapore, a wholly owned subsidiary of Komatsu Limited, Japan. Komatsu is the world’s second largest manufacturer of hydraulic excavators and has manufacturing and marketing facilities. The plant was started in 1975 by L&T to manufacture hydraulic excavators for the first time in India. In 1998, it became a joint-venture. The Bengaluru works comprises machinery and hydraulics works, with a manufacturing facility for design, manufacture and servicing of earth moving equipment. The hydraulics works has a precision machine shop, manufacturing high pressure hydraulic components and systems, and designing, developing, manufacturing and servicing hydraulic pumps, motors, cylinders, turning joints, hose assemblies, valve blocks, hydraulic systems and power drives as well as allied gear boxes. In April 2013, L&T bought the 50% stake held by Komatsu Asia & Pacific. The company's name was changed to L&T Construction Equipment Limited.
- L&T-John Deere: In 1997, L&T established a 50-50 joint venture with John Deere to manufacture tractors in India, called L&T - John Deere. L&T sold their interest to John Deere in 2005.
- L&T Case: In 1998, L&T established L&T-Case Construction with CNH Global as a 50-50 joint venture to build backhoes. In 2011, L&T decided to exit this joint venture and sold its share to CNH, and the company was renamed Case New Holland Construction Equipment India.
- L&T Finance: Larsen & Toubro financial services Financial Services is a subsidiary which was incorporated as a non-banking financial company in November 1994. The subsidiary has financial products and services for corporate, construction equipments etc. This became a division in 2011 after the company declared its restructuring A partnership between L&T Finance and Sonalika Group farm equipment maker International Tractors Ltd in April 2014 provided credit and financing to customers of Sonalika Group in India.
- L & T Mutual Fund is the mutual fund company of the L&T group. Its average assets under management (AUM) for the quarter Jul 2013 to September 2013 was ₹ 1,580 crore.
- Larsen & Toubro Infrastructure Finance: this wholly owned subsidiary commenced business in January 2007 upon obtaining Non-Banking Financial Company (NBFC) licence from the Reserve Bank of India (RBI). As of 31 March 2008, L&T Infrastructure Finance had approved financing of more than US$1 billion to select projects in the infrastructure sector. It received the status of "Infrastructure Finance Company" from the RBI within the overall classification of "Non-Banking Financial Company".
- L&T Technology Services, a subsidiary of Larsen & Toubro, is a global engineering services company headquartered out of Vadodara, Gujarat, India. It offers design, development and testing solutions across the product and plant engineering value chain, for various domains including Industrial Products, Transportation, Aerospace, Telecom & Hi-tech, and the Process Industries. As of 2016, L&T Technology Services employs over 10,000 workers, across 12 global delivery centres and has operations in 35 locations around the world. Its clientele includes a large number of Fortune 500 companies globally.
- L&T Valves business group markets valves manufactured by L&T's Valve Manufacturing Unit and L&T's joint-ventures, Audco India Limited, India and Larsen & Toubro Valves Manufacturing Unit, Coimbatore as well as allied products other manufacturers. The group's manufacturing unit in Coimbatore manufactures industrial valves for the power industry, along with flow control valves for the oil and gas, refining, petrochemical, chemical and power industries, industrial valves and customised products for refinery, LNG, GTL, petrochemical and power projects. L&T Valves Business Group has offices in the USA, South Africa, Dubai, Abu Dhabi, India and China, and alliances with valve distributors and agents in these countries.
- L&T-MHPS Boilers is a joint-venture between L&T and Mitsubishi Hitachi Power Systems. The group specialises in engineering, manufacturing, erecting and commissioning of supercritical steam generators used in power plants. It is mainly headquartered in Faridabad with a manufacturing facility in Hazira and an engineering centre in Chennai and Faridabad. Currently the group is engaged in projects for JVPL, MAHAGENCO, Nabha Power & RRVUNL.
- L&T MHPS Turbine Generators Pvt Ltd: in 2007, Larsen & Toubro and Mitsubishi Heavy Industries set up a joint-venture manufacturing agreement to supply a supercritical steam turbine and generator facility in Hazira. This followed a technology licensing and technical assistance agreement for manufacture of supercritical turbines and generators between L&T, MHI, and Mitsubishi Electric Corporation (MELCO), headquartered in Tokyo, Japan. In February 2014, MHI and Hitachi Ltd integrated the business centred on thermal power generation systems (gas turbines, steam turbines, coal gasification generating equipment, boilers, thermal power control systems, generators, fuel cells, environmental equipment and so on) and started a new company as Mitsubishi Hitachi Power Systems (MHPS) Ltd, headquartered in Yokohama, Japan.
- L&T Howden Pvt Ltd is a joint-venture between L&T and Howden to manufacture axial fans and air pre-heaters in the range of 120-1200 MW to thermal power stations. L&T Howden is an ISO 9001 and ISO 5001 certified organisation, with a plant located in Surat Hazira and a marketing office in Faridabad.
- L&T Special Steels and Heavy Forgings Pvt Ltd. is a joint-venture between L&T and NPCIL, headquartered at Hazira. It is the largest integrated steel plant and heavy forging unit in India, capable of producing forgings weighing 120 MT each. LTSSHF currently is engaged in projects from the nuclear, hydrocarbon, power and oil and gas sectors.
- L&T General Insurance
- In 2015, the company began developing commercial, retail and office space around the Hyderabad Metro Rail project.
In January 2011, its Chairman A M Naik announced that the company would be restructured into nine independent virtual companies. with a CEO, CFO and HR head, its own profit and loss account, and board with at least three independent directors. Each board does not have any legal or statutory standing, but merely advises management.
The original nine virtual companies which operated in different segments, were subsequently increased to 12, for which the companies formed are: Building and Factories, Transportation & Infrastructure, Metallurgical & Material Handling, Power Transmission and Distribution, Hydrocarbon and Chemicals, Water, Smart World & Communication, Geo-Structure, Power, Infotech, Finance, Heavy Civil Engineering, and Engineering Services. Hydrocarbon and Chemicals later became a real company, with independent standings and stocks.
The equity shares of the company are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). The company’s shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the NSE. Its global depository receipts (GDR) are listed on the Luxembourg Stock Exchange and London Stock Exchange. As on 31 March 2013, Financial institutions held around 30.5% equity shares in L&T. Over 8.5 lakh individual shareholders hold approx 24% of its shares. Foreign Institutional Investors held approx 16.6% shares. Others held approx 29% of the shares. Life Insurance Corporation of India is the largest shareholder in the company with 16.03% shareholding.
|Shareholders (as on 31 March 2013)||Shareholding|
|Foreign Institutional Investors (FII)||16.58%|
|L&T Employees Welfare Foundation||12.09%|
|Directors & Relatives||00.43%|
As on 31 March 2013, the company (excluding its subsidiaries) had 54,062 permanent employees, out of which 2,635 were women (4.87%) and 74 were employees with disabilities (0.14%). During the FY 2012-13, the company incurred ₹ 4,436 crore for employee benefit, including salaries.  As per the news article in November 2016, it had around 109,000 employees after mass firing of 14,000 across all sectors.
Awards and recognition
- In 1997, the Bengaluru Works division was awarded the "Best of all" Rajiv Gandhi National Quality Award
- In 2014 Larsen & Toubro ranked 500 on Forbes list of 2000 world’s largest and most powerful public companies based on revenues, profits, assets and market value. 54 Indian companies made it to the prestigious list, and L&T is the highest-ranked company in the engineering and construction section and 10th among all Indian public and private sectors.
- According to the Brand Trust Report 2012 published by Trust Research Advisory, a brand analytic's company, L&T was positioned 47th among India's most trusted brands. Subsequently, in Brand Trust Report 2013, L&T was ranked 127th among the most trusted brands in India while according to the Brand Trust Report 2014, L&T was elevated to the 38th position among India's most trusted brands.
- In 2013, L&T Power received 'Golden Peacock National Quality Award – 2012' at the 23rd World Congress on 'Leadership & Quality of Governance'.
- In 2012, Forbes ranked L&T as 9th most innovative company in the world. L&T was also featured in the Forbes Asia's annual 'Fabulous 50' list in 2010, for the fifth time in a row.
- In 2012, L&T was ranked 4th by Newsweek in the global list of green companies in the industrial sector.
- In 2013 the Harvard Business Review named L&T's Executive Chairman, A M Naik, as the 32nd Best Performing CEO in the world.
Allegations of bribery
In 2016 The Huffington Post and The Age reported that Larsen & Toubro was involved in the alleged bribery scandal centered around Unaoil. According to these reports, leaked emails from Unaoil show that a senior executive at Larsen & Toubro was aware that the company had contracted Unaoil to bribe a senior official at Abu Dhabi Marine Operating Company for the purpose of winning contracts worth $400 million. By 2011 Larsen & Toubro had won contracts worth $500 million from Abu Dhabi Marine Operating Company. The Vice President of Larsen & Toubro has confirmed that Unaoil was contracted to do some consultancy work, but denies that any payment was made to Unaoil.
- L&T Realty
- Larsen & Toubro Infotech
- L&T Technology Services
- L & T Mutual Fund
- List of companies of India
- Heavy equipment
- List of oilfield service companies
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