The non-convertible debentures issued carry a face value of Rs 1 crore each and have been subscribed to by financial institutions.

L&T, which recorded a 29 per cent rise in net profit to Rs 532 crore in 1997-98, has gone on a debt mop-up exercise to fund its diversified businesses. Secured loans shot up to Rs 2,274.25 crore, as against Rs 1,611.31 crore in the previous fiscal. Even unsecured loans at Rs 545 crore were higher, compared with Rs 374 crore in the previous year.

The company had raised Rs 150 crore last year through the issue of non-convertible debentures at a coupon of 14.5 per cent. Another Rs 250 crore was raised by way of an issue offloating rate debentures.

Besides, L&T mopped up over Rs 525 crore through the issue of secured redeemable non-convertible bonds, of which Rs 371 crore came through the issue of its regular return bonds while deep discount bonds fetched Rs 500 crore. However, the 1997-98 liability for the deep discount bonds is lower as the future interest obligation amounts to over Rs 372 crore.

L&T achieved a 7 per cent growth in sales in 1997-98, while profit before tax was up by 25 per cent. Order booking rose by 14 per cent to Rs 6,440 crore and the order backlog at the year-end stood at Rs 5,250 crore. The higher profit was aided by an extraordinary profit earned due to sale of the company's construction equipment manufacturing facility at Bangalore.

The company has identified infrastructure as a thrust area for growth and is planning a major foray into projects in roads, bridges, tunnels, ports etc.