L&T Finance Holdings said that its subsidiary L&T Infrastructure Finance had reduced its exposure in providing loans to the power sector, primarily due to increasing uncertainties about coal availability for the sector.

The company whose initial public offer opens on Wednesday at a price band of INR 51 to INR 59 per share, also said that it's another arm L&T Finance, has stopped lending to micro finance institutions in Andhra Pradesh.

The IPO which is to close on July 29, is expected to raise INR 1,245 crore from its listing on the bourses and will be among a few big issues to have come up amid volatile market conditions in this fiscal so far. For anchor investors, the issue will open a day earlier, on July 26.

Mr YM Deosthalee chairman told reporters that "We have reduced our exposure in power sector from 40% in 2009-10 to 28% in 2010-11... Towards the end of last (fiscal) year, we have seen some issues in power sector because of non availability of coal and some issues in transmission segment.”

He added that this was not a major risk for L&T Infrastructure Finance as it has a diversified portfolio, which has increased lending to other sectors like roads and telecom.

In 2010-11, the L&T Infra Finance provided loans worth INR 1,242.94 crore to roads sector, which contributes 17.30% of its total loan portfolio, while its exposure in telecom sector was 13.8%, the red herring prospectus of L&T Finance Holdings said.

(Sourced from PTI)