Larsen & Toubro (L&T), India’s engineering and infrastructure giant, has successfully raised Rs 500 crore through the issuance of ESG-linked non-convertible debentures (NCDs), reinforcing its commitment to sustainable financing. The unsecured debt instruments, carrying a coupon rate of 6.35%, are tied to predefined environmental, social, and governance benchmarks and will mature in June 2028. Concurrently, the company reported a 25% surge in consolidated profit after tax (PAT) for Q4 FY25, reaching Rs 5,497 crore, driven by strong operational performance and one-time gains. Revenue for the quarter rose to Rs 74,392.28 crore, underscoring L&T’s continued growth trajectory.
L&T Issues ESG-Linked Debentures Worth Rs 500 Crore
Larsen & Toubro announced the allotment of 50,000 listed, rated, unsecured, redeemable non-convertible debentures (NCDs) of face value Rs 1 lakh each, aggregating to Rs 500 crore. The NCDs bear an annual interest rate of 6.35% and are scheduled to mature on June 19, 2028. The interest payments will be made annually.
The issuance falls under the framework for Environment, Social, and Governance (ESG) Debt Securities (excluding green debt securities) as defined by the Securities and Exchange Board of India (SEBI). These instruments are directly linked to achieving specific ESG targets set by the company.
The NCDs are proposed to be listed on the National Stock Exchange (NSE), offering institutional and retail investors an opportunity to participate in L&T’s sustainability-led financial instruments.
Strategic Move in ESG Financing
By issuing ESG-linked debt, L&T is aligning its financial strategy with global trends that increasingly prioritize sustainability. The firm’s initiative supports broader environmental and governance goals while simultaneously tapping into a growing investor base focused on responsible capital deployment.
This strategic move underscores the company’s long-term intent to integrate ESG imperatives into its core business operations. It also reflects a wider trend among Indian corporates seeking to enhance ESG disclosures and attract green-focused investment flows.
Strong Q4 FY25 Financial Performance
In addition to the fundraise, L&T posted a consolidated profit after tax (PAT) of Rs 5,497 crore for the quarter ended March 31, 2025, a significant increase from Rs 4,396 crore during the same period last year. This 25% year-on-year growth was supported by higher revenues and a notable exceptional gain.
Total revenue from operations climbed to Rs 74,392.28 crore in Q4 FY25, up from Rs 67,078.68 crore in Q4 FY24, marking a year-on-year growth of over 10%.
The earnings momentum reflects healthy order inflows, strong execution across project verticals, and L&T’s ability to manage cost pressures while leveraging operational efficiencies.
Broader Implications for Indian Debt Markets
L&T’s successful issuance of ESG-linked NCDs could set a precedent for other large Indian corporates to explore sustainability-tied financing. With investors increasingly scrutinizing corporate ESG credentials, such instruments offer both reputational and financial benefits.
Furthermore, listing these securities on the NSE will likely increase liquidity and visibility, encouraging broader adoption across sectors.
Outlook
L&T continues to demonstrate resilience and adaptability in a dynamically shifting economic environment. With its growing focus on sustainability and strong financial fundamentals, the company is well-positioned to capitalize on infrastructure demand while aligning with responsible investment frameworks.
Its foray into ESG-tied debt signals a meaningful step toward integrating sustainability into India’s corporate financing landscape, which is poised to gain momentum in the coming years.
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