Larsen & Toubro ready to help infotech unit scale up in preparation for its IPO

Mumbai

LARSEN & Toubro Ltd, India's biggest engineering company, is open to spending as much as US$1 billion on acquisitions for its software-services unit as the subsidiary prepares for an initial public offering.

Buying companies will help L&T Infotech build scale and compete with larger rivals, R Shankar Raman, Larsen's Mumbai-based chief financial officer, said. The company may spend between US$100 million and US$1 billion, he said, without being more specific.

Larsen, which lost a bid to buy Satyam Computer Services Ltd, the company at the centre of India's biggest corporate fraud, and local software developers are turning to acquisitions to boost revenue amid estimates demand for their services will fall. Worldwide spending on information-technology services is projected to shrink 0.7 per cent this year, led by cuts at US companies, researcher…