L&T fixes Sept 12 as record date for ₹10,000 cr share buyback

Construction & engineering major Larsen and Toubro (L&T) has fixed September 12, 2023, as the record date for determining the entitlement and the names of equity shareholders eligible to participate in the buyback of shares worth up to ₹10,000 crore.

The company says the amount works out to be 14.06% and 11.97% of the aggregate of fully paid-up equity share capital and free reserves of the company.

The board of the company had announced a share buyback worth ₹10,000 crore, the first ever in the company’s 85-year history, on the day of releasing its June quarter earnings on July 25.

L&T says its shareholders, on August 25, approved the proposal to buy back 3,33,33,333 fully paid-up equity shares of face value of ₹2 each, for an aggregate consideration of up to ₹10,000 crore per equity share on a proportionate basis through tender offer route through stock exchange mechanism.  

The shares to be part of the buyback will be divided into the reserved category (for small shareholders) and the general category (for other eligible shareholders).

On the objectives of the buyback move, L&T says the buyback is part of its 'Lakshya 26' strategic plan, which was formulated in FY22, which aims to improve return on equity and maximise shareholder value.

The equity shares are proposed to be repurchased at ₹3,000 apiece, subject to any increase by the buyback committee. It represents a premium of 29.83% to the volume-weighted average market price of equity shares during the three months preceding July 20, 2023, the date on which the buyback was proposed.

It represents a premium of 20.28% over the closing price of shares on the BSE and NSE on July 19, 2023, and 13.66% and 13.71% over the closing market price of shares on the BSE and NSE, respectively, on the day prior to the date of the buyback committee meeting.

"The buyback price has been arrived at after considering various factors including but not limited to the earnings per share, price earning ratio, impact on the net worth of the company, the trends in the volume weighted average prices, and the closing price of the equity shares at BSE and NSE," the company adds.

For the first quarter ended June 30, 2023, L&T posted a 46.5% year-on-year (YoY) growth in consolidated net profit at ₹2,493 crore from ₹1,702 crore in the corresponding quarter of the previous year.

The consolidated revenue stood at ₹47,882 crore for Q1 FY24, recording a YoY growth of 34%, while international revenue was at ₹19,022 crore, constituting 40% of the total revenue. L&T’s EBITDA came in at ₹4,869 crore, which was 23% higher as compared to ₹3,953 crore in the same period of the last fiscal, while the margin stood at 10.2% against 11% in the year-ago period.