The largest engineering and construction company of India, Larsen&Toubro (L&T) is harboring plans to enter into the banking segment by applying for a banking license. The company aims to do so through its subsidiary, L&T Finance so that it gets access to cheaper funds and increase its presence in the field of infrastructure financing.

According to AM Naik, chairman of L&T, although they are amongst the three top NBFCs of the country, they still aspired to be a bank. "We are going through the RBI's discussion paper and would provide our feedback by September 30," he said.

"We also expect the government to come out with some policy decision by the end of December on companies planning to enter the banking space, after which we will apply for the licence. In the meantime, we will evaluate the trend, and also how L&T Finance should be restructured to make the best use of its banking licence," Naik said.

"We are evaluating various options for unlocking the value of our financial unit, L&T Finance. Based on what comes out of the policy decision, we will either go for an IPO or a private equity participation," Naik said while speaking about the company's intentions to unlock the value of L&T Finance by early next year.

L&T is also planning to restructure its real estate business. "With the increase in the number and maturity of concessions, L&T is in the process of restructuring them into independent verticals like infrastructure, realty and power development. L&T will continue to selectively exploit the growing opportunities in all the aforesaid sectors," Naik said.