L&T Finance was exploring “inorganic structures” to exit the real estate projects lending business or at least reduce its exposure in the segment by partnering with other financiers, a top company executive said on Monday. 

The company is also looking to partner with dedicated funds to create a platform which will commit funds to the infrastructure projects. This will help the company in eventually bringing down its loan book in the segment. 

The L&T Group company, which had an exposure of over Rs 11,000 crore to the realty sector as of March 2022, felt that the risk-return paradigm in the sector was “not favourable” despite some improvements that it had witnessed like an improvement in flat sales, its Managing Director and Chief Executive Dinanath Dubhashi told reporters. 

He said that the company was looking at “inorganic structures” to get down its portfolio, but made it clear that there was no intent of taking a haircut in the process. If a deal did not materialise, it would gradually run down the portfolio, he added. 

In a presentation shared with the bourses, the company said that it would not be doing any new underwriting of loans in the segment and would explore exit through various inorganic structures. 

Giving a peek into what was in the works, Mr Dubhashi said that the plan might involve partnering with a financier who would give additional funding for a stuck project, which would eventually help L&T Finance as the developer would be able to deliver the project, realise the sale potential and pay off the creditor.