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Mumbai, June 7: After a gap of two decades, the Rs 15,000-crore engineering and construction major Larsen & Toubro Ltd (L&T) on Wednesday declared a bonus issue to its existing shareholders in the ratio of 1:1. The bonus issue, which would mean one additional equity share for every one existing equity share held by shareholders, is being issued by capitalising a part of the reserves, and will increase L&T’s capital base to a level that will better reflect its current scale of operations, a company release said. The issue is subject to the approval of the shareholders in the company’s annual general meeting.
The last issue of bonus shares in the ratio of 3:5 was declared in 1986. L&T’s first issue of bonus shares was in 1973, when one bonus share was issued for every three shares. Subsequently, bonus issues were made in 1977 (1:2) and 1982 (3:5).
The issue will add depth and eventually create a larger market float in terms of the number of L&T shares, and will thus increase liquidity and turnover of the company shares in the stock market, the release added. The company has the advantage of being present in almost all the core sectors of the economy. L&T also stands to gain from the capex plans of several companies which are setting up capacities to meet growing demand in sectors such as petroleum exploration and refining, steel, cement, power, petrochemicals, the company said. L&T is also playing an increasing role in supply of equipment to the defence and aerospace sectors.
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