Friday, July 19, 2024
HomeMarkets NewsL&T enhances share buyback price, stock up over 3 per cent

L&T enhances share buyback price, stock up over 3 per cent


Larsen & Toubro has raised its share buyback price to Rs 3,200 from the Rs 3,000 it had announced earlier, in order to ensure that its buyback programme goes through.

In an exchange filing late on Monday, the company said it had raised the buyback price. The number of shares being bought back will be reduced to 3.13 crore from 3.33 crore earlier, translating into 2.22 per cent equity being bought back, compared to 2.37 per cent earlier. The total outgo for the buyback exercise remains the same at just over Rs 10,000 crore.

Also read: Today is last date to participate in L&T’s mega buyback offer

When the company announced the buyback in July, the management had told media that there was scope to change the price, and the final price would be fixed closer to the buyback date.

Between July 25, when it announced the buyback, and September 8, the stock price has appreciated over 13 per cent, bringing it closer to the tentative price announced earlier.

One of the main objectives of the company under ‘Lakshya ‘26’ is to boost the return on equity and maximise shareholder value. The buyback is one of the means to achieve that. Shareholders need enough money on the table to induce them to sell their shares under the buyback.

Also read: L&T stock at all-time high on Q1 results and buyback proposal

This is the company’s second attempt at a buyback, after it ran into trouble with the Securities and Exchange Board of India in 2019. At that time, the company was planning to buy back shares worth ₹9,000 crore at ₹1,475 a share, but was directed by SEBI not to proceed with the buyback, as its consolidated debt to paid-up capital was not in compliance with regulatory norms.

At 10.09 am shares of L&T were up 3.2 per cent at Rs 2,986 on the NSE.

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