L&T to buy back shares worth ₹9,000 crore at 13% premium

L&T will buy back up to 60 million shares, at a premium of more than 13% over Tuesday's share price, aggregating up to 4.29% of the paid-up equity capital

Ravindra N. Sonavane
Updated24 Aug 2018, 09:39 AM IST
L&T shares were trading at a record high of ₹ 1,345.50 each on the BSE
L&T shares were trading at a record high of ₹ 1,345.50 each on the BSE

Mumbai: Construction and engineering company Larsen and Toubro Ltd on Thursday approved a share buyback worth 9,000 crore at 1,500 apiece.

The buyback price is at a 13.5% premium from Tuesday’s closing price of 1,322.

The L&T board approved the buyback of up to 60 million shares, aggregating up to 4.29% of the company’s paid-up equity capital.

Following the announcement, L&T shares ended 2.3% higher on BSE at the end of the day’s trade on Thursday. The benchmark Sensex rose 0.13% to 38,336.76 points. Year to date, L&T has risen 7.6%.

“L&T’s proposal for a share buyback is a natural fallout of limited investment opportunities in EPC (engineering, procurement and construction), its aversion to investment in long-gestation projects, and strong cash-flow generation in its core E&C business,” said Kotak Institutional Equities in a 21 August report.

At the end of March, the company had 8,600 crore in cash and cash equivalents. On a consolidated basis, it was at 17,425 crore. “Consistency of dividend payout through the weak past five-year period and a large quantum of current dividend payout ($350 million) strengthen the case for a structured buyback programme for L&T. The current buyback meaningfully supports L&T’s case for achieving 18% RoE (return on equity) by 2020-21,” the Kotak report added.

Tata Consultancy Services and HCL Technologies had recently announced buybacks worth 16,000 crore and 40,000 crore, respectively

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.MoreLess
First Published:24 Aug 2018, 09:39 AM IST
HomeCompaniesNewsL&T to buy back shares worth ₹9,000 crore at 13% premium

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Tata Steel

    157.75
    03:43 PM | 19 JUL 2024
    -8.6 (-5.17%)

    Tata Power

    414.15
    03:59 PM | 19 JUL 2024
    -15.85 (-3.69%)

    Bharat Electronics

    306.30
    03:45 PM | 19 JUL 2024
    -7.2 (-2.3%)

    Zee Entertainment Enterprises

    137.55
    03:57 PM | 19 JUL 2024
    -4.9 (-3.44%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Tata Teleservices Maharashtra

    102.11
    03:59 PM | 19 JUL 2024
    4.68 (4.8%)

    Rail Vikas Nigam

    614.00
    03:59 PM | 19 JUL 2024
    27.65 (4.72%)

    Jubilant Pharmova

    752.25
    03:43 PM | 19 JUL 2024
    25.3 (3.48%)

    One 97 Communications

    458.70
    03:55 PM | 19 JUL 2024
    13.65 (3.07%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      74,925.00-1,347.00
      Chennai
      74,558.00-1,566.00
      Delhi
      75,144.00-389.00
      Kolkata
      74,558.00-531.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.86/L0.00
      Chennai
      100.75/L-0.01
      Kolkata
      104.95/L0.00
      New Delhi
      94.72/L0.00
      OPEN IN APP
      HomeMarketsCibilPremiumBudget