L&T Finance Company, the financial arm of construction and engineering giant Larsen and Turbo, is planning to raise Rs 500 crore through a non-convertible debenture issue (NCD) with an option to retain over-subscriptions worth Rs 500 crore.

SBI Capital Markets, JM Financial Consultants, and Standard Chartered Bank have been appointed as fund managers for the issue to be closed on September 14.

The NBFC's NCDs, planned to be open for subscription from August 18, will have different tenures of five, seven, and 12 years with a coupon rate of 9.51-10.24 per cent.

The company, having capital adequacy ratio of 16.41 per cent, fixed 35 per cent each of the total issue size for retail investors and qualified institutional buyers while 30 per cent has been reserved for high net worth individuals (HNIs).

Mr Y. M. Deosthalee, CFO, L&T said, "Through the issue, we will be adding one more source of funding and broad basing the investor base."

Mr N. Sivaraman, Director, L&T Finance informed that the firm will use funds raised from the issue for loan restructuring and to further expand its business.