L&T secures $700 mn sustainability-linked trade facility with StanChart

Engineering and infrastructure major Larsen & Toubro (L&T) has secured a $700 million Sustainability-Linked Trade Facility (SLTF) with Standard Chartered, underscoring its commitment to green financing and sustainable business practices.

The SLTF is benchmarked against key performance indicators, including greenhouse gas emission intensity and freshwater withdrawal, and is aligned with the Loan Market Association’s Sustainability-Linked Loan Principles.

In June, L&T had issued India’s first listed sustainability-linked bond worth $60 million under Sebi’s ESG Bond Framework. The newly secured SLTF builds on that step, with performance tied to key indicators such as greenhouse gas emission intensity and freshwater withdrawal.

The facility is also aligned with the Loan Market Association’s Sustainability-Linked Loan Principles, ensuring compliance with global standards for sustainability-linked financing, the company said.

Independent assurance on L&T’s performance will be provided annually, backed by a second-party opinion from risk management firm DNV.

Commenting on the development, an L&T spokesperson said the facility reinforced its long-term sustainability goals, including carbon neutrality by 2040 and water neutrality by 2035. The company said sustainability continues to guide its investments in low-carbon technologies, resource optimisation and biodiversity conservation.

Despite the financing milestone, L&T’s shares slipped 0.66% to ₹3,704.90 on the NSE as of 1:54 pm, after falling to a day’s low of ₹3,681.30.

The decline came after brokerage BoFA Securities cut its rating on the stock to “underperform” from “buy”, a double-downgrade, citing limited upside potential after recent outperformance.

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BoFA, however, raised its FY26–28 earnings estimates by 3–4%, noting that L&T’s exit from the Hyderabad Metro project is accretive to earnings and return on equity. The Telangana government has agreed to acquire L&T’s stake in Phase 1 of the project, paying ₹2,000 crore and taking over more than ₹13,000 crore of associated debt.

Analysts say the metro exit removes a long-standing overhang on the stock. JM Financial had noted last week that the development materially improves L&T’s balance sheet and boosts investor confidence.