The division will see the Rs 37,000-crore worth L&T broken down into nine independent units with its very own management team consisting of CEO, CFO and HR head. Naik also said that the companies that emerged out of the parent L&T could be listed in the bourses before 2015.
“By March 2012, each of these independent companies should by 75% ready to get listed, should we want to list them," Naik said. “We will decide which ones get listed as we go along. I can"t tell you now how many will be spun off by 2015."
Naik also elaborated on the management model and revealed that ten directors needed for the various position in the companies have been identified. He, However refused to name them. “The independent companies will act as if they are listed entities, short of facing the shareholders," he said.
The core L&T board has agreed to the re-structuring plan. The nine companies would deal in Power, hydrocarbon, machinery & product, switchgear, heavy engineering, infrastructure, building & factories, metals & minerals and electrical businesses.
Naik said that the re-structuring is to ensure that the succession plans will be streamlined and that the exercise would "make the job easier for his successor" and ensure the smooth running of the varied business interests of L&T, ranging from power to roads to aerospace to switchgear.
“No other company in the world is as complex as L&T... not even General Electric. No one chairman can manage such a complex operation. I was able to do it because I have been with L&T for 46 years and have started 60% of these businesses," Naik said categorically.
The L&T shares saw an upward trend following the news break. While the net profit rose 31.80% to Rs. 764.98 crore on 17.70% increase in net sales to Rs. 9260.77 crore in Q2 September 2010 over Q2 September 2009.