BackL&T increases buyback price by ₹200 to ₹3,200 as shares jump
On Monday, L&T reduced the number of shares it will buy in the offer from 33.33 million to 31.25 million. This is to ensure that the company's spend in the buyback is restricted at Rs.10,000 crore as the stock has rallied since the original announcement
PremiumMUMBAI : Engineering and construction giant Larsen and Toubro Ltd (L&T) on Monday evening increased its offer price to ₹3,200 apiece from ₹3,000 per share, for its proposed upcoming ₹10,000 crore share buyback, as the stock rallied and the premium to market price narrowed since the original announcement in July.
On 26 July, L&T had announced the buyback—the first such offer in its eight-decade-long history.
L&T had said it may offer to buy back a 2.4% stake, or 33.33 million of shares, held by public shareholders through a book-building process on the stock exchange.
During the announcement, the buyback offer price at ₹3,000 per share was a 17% premium to the company’s market price of ₹2,562 then.
However, the stock has rallied significantly, narrowing this premium, and lowering the chances of shareholders tendering their shares in the proposed buyback.
At Monday’s closing, the price of ₹2,894, the original buyback offer price was at a premium of just 3.7%.
“L&T is focused on enhancing its return on equity (RoE)," said R. Shankar Raman, whole-time director & CFO – L&T, in a statement on Monday evening.
The upward revision in the buyback price is meant to sweeten the offer for public shareholders.
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