After TCS, Infosys and a host of IT companies, the board of engineering giant Larsen & Toubro has approved the proposal to buy back six crore shares amounting to Rs 9,000 crore at a premium to the current market price to reward its shareholders.
In a stock exchange filing, L&T said its board has approved the proposal to buy back six crore shares at a maximum price of Rs 1,500 per share. The buyback price is at over 13 per cent premium to Tuesday’s closing price of Rs 1,322.15 per share. This is L&T’s first-ever share buyback proposal. The buyback size is 4.29 per cent of paid-up equity capital of the company.
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, at a premium over the daily average of the closing prices of equity shares of the company quoted on the NSE 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.
Shares rose over 2 per cent on bourses after the board approved the proposal. The stock settled at Rs 1,352.50 on the BSE, up 2.3 per cent from the previous close. The company’s market capitalisation climbed by Rs 4,289 crore to Rs 1,89,619 crore.
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 TCS approved a buyback of Rs 16,000 crore.
India’s second largest IT services company, Infosys had said in December 2017 that it completed its Rs 13,000 crore buyback programme.