Engineering and infrastructure major Larsen and Toubro Ltd (L&T), which is in the process of raising debt for the Rs12,132 crore metro rail project in Hyderabad which it recently bagged, said on Sunday it anticipates a major chunk of the debt from State Bank of India.
According to Larsen and Toubro Hyderabad Metro Rail Managing Director V B Gadgil, the company expects to achieve the financial closure by February next year. ''About 25 financial institutions have shown interest and we are currently in talks with major banks including ICICI, Punjab National Bank and Axis for tying up the debt component of the project.
''Considering the size of the project, we will go for more than one banker for raising debt. State Bank of India, which has a larger base and huge appetite for providing funds, is expected to emerge as the lead financier,'' said Gadgil.
Unlike the traditional model where companies approach banks and financial institutions for specific fund, L&T approached them with project details and revenue models and expects the banks to come out on how much they are going to fund, he said.
"Normally in infra projects they go up to 4:1 (debt-equity ratio). This is a large project of its own kind not only in India but in the world. Everybody will be cautious. Somebody wanted to give Rs2,000-3,000 crore. SBI is the largest among all banks," Gadgil said, refusing to specify on how much SBI is going to lend.
Gadgil does not anticipate changes in the project schedules due to the change in the leadership in Andhra Pradesh. "Agitations like Telangana or change in the leadership will not affect the progress of the project," he said.