Larsen & Toubro (L&T), the Mumbai-headquartered construction and engineering giant, approved the first-ever share buyback in stock market history on Thursday.
Larsen & Toubro (L&T), the Mumbai-headquartered construction and engineering giant, approved the first-ever share buyback in stock market history on Thursday. “The board of directors of the company at its meeting held today at 9.30 a.m. and concluded at 11.10 a.m. has approved a proposal to buyback up to 6,00,00,000 equity shares (six crore only) of the company being 4.29% of the total paid up equity share capital,” L&T said in an exchange filing. L&T has fixed a share buyback price at Rs 1,500, 13.45% premium to its Tuesday’s closing price of Rs 1,322.45 on BSE.
L&T has would be spending as much as Rs 9,000 crore in buying back about 6,000 crore equity shares which accounts to 4.29% of the paid-up capital. The specific price will be determined by the board/committee under the authority of the shareholders in accordance with the SEBI (Buyback of Securities) Regulations, 1998 (“the Regulations”), at a premium over the daily average of the closing prices of equity shares of the Company quoted on the National Stock Exchange of India Ltd during the two weeks preceding the date of the board/committee meeting subject to the maximum price of Rs 1500 per share, L&T said in a statement.
L&T’s pre-buyback shareholding pattern as on 17 August 2018
Following the share buyback approval, L&T shares surged as much as 2.8% to a day’s high share price of Rs 1,359.2 on BSE. The buyback is subject to the approval of the members by means of a special resolution through a postal ballot. The public announcement setting out the process, timelines and other requisite details will be released in due course in accordance with the buyback regulations, L&T said further.
So far in 2018, the boards of many blue-chip firms such as TCS and HCL Technologies have approved share buyback proposals. Earlier in June, India’s largest IT company and most valued firm according to stock market value Tata Consultancy Services approved a buyback of Rs 16,000 crore.