Engineering and infrastructure conglomerate Larsen & Toubro (L&T) will seek approvals from shareholders for a share buyback, the first-ever in its history, and also for a special dividend for FY24.The company’s board will seek approvals for the buyback and special dividend at its board meeting convened on July 25. If approved, the record date for the dividend would be August 2, L&T said in a regulatory update.However, the firm did not provide any details of the share buyback, including the number of shares it intends to buy nor the amount it would have to shell out.This is the first buyback of shares in the firm’s 85-year-old history.
Earlier, in August 2018, the company’s board had approved a buyback of up to 4.29% of its paid-up equity capital, totalling to about Rs 9,000 crore.However, the proposal did not get Sebi approvals, with the market regulator turning it down citing compliance issues. The Sebi had also raised concerns of increasing debt on its books, following the buyback. L&T later shelved the plans.L&T had recorded a consolidated net profit at Rs 12,531 crore for FY23, a 20.3% rise in FY22. In December 2022, L&T divested a 51% stake in Infrastructure Development Projects as part of its ‘Lakshya 2026’ roadmap, and was also looking at “certain exits” in FY24.
The company has also earmarked a capex of Rs 5,000 crore for FY24 that includes investments for data centre and electrolyser plant.Separately, L&T also said its board approved the merger of its wholly-owned subsidiary — L&T Innovation Campus (Chennai), or (LTICCL) — with L&T Seawoods (LTSL). Following the merger, which is subject to regulatory approvals, LTICCL would cease to be a subsidiary of the company, it said.
LTICCL has an equity share capital of Rs 7 crore, and has no revenue. The firm has three wholly-owned subsidiaries, which are yet to commence commercial operations. Post the merger, LTICCL and its subsidiaries would become wholly-owned subsidiaries of LTSL. LTSL, also a wholly-owned subsidiary, has a networth of Rs 2,500 crore.