Restructuring is probably the best option available to L&T for autonomous growth

Restructuring is probably the best option available to L&T for autonomous growth For flexible, faster and autonomous growth, L&T has decided to go for restructuring.

In this process, L&T will be divided into nine separate companies with one business head and 8-9 member board for each company. All these members would be experts in their respective fields.

JP Nayak, member of Engineering and construction major Larsen & Toubro board said that his company has the potential to grow four times bigger in the coming ten years but currently there is a need to equip the company to allow it to grow at the same rapid pace.

L&T board will remain as the ultimate decision maker. New companies will not enjoy any legal power, but later on in the future they will be listed once they gain critical mass and required maturity. L&T will have to prepare separate accounts for each entity.

Presently, L&T has five subsidiaries, including L&T Finance and L&T Infotech. These two companies will remain aloof from restructuring plan. Other subsidiaries, which will be formed after restructuring will include the building & factories, infrastructure, industrial projects & water, electrical construction, hydrocarbons, heavy engineering & systems, electrical & automation, mechanical & industrial products and power equipment.

Each entity will have its separate board but the key decisions will be taken by the old L&T board. But the officials are thinking that whether this format will help to maintain the rapid pace of growth or it will create more complications.

Tata and AV Birla Group is also marking on the restructuring plan of L&T.