Shares of Larsen & Toubro Ltd (L&T) rose as much as 6.35 percent in biggest daily percent gain since October 2017, after the board said on Saturday that it will meet on August 23 to consider a share buyback proposal.

While the construction and engineering giant did not specify amount, Morgan Stanley analysts believe buyback is “over and above the regular dividend and is tax efficient from a shareholder perspective.”

This is L&T’s first buyback and if approved by board, it could be taken by market as a signal of an alternative to reward shareholders. Morgan Stanley rated the stock 'overweight’ with a price target of Rs 1,786.

More than 3.2 million shares traded, 1.6 times the 30-day average of 2.1 million shares.

Shares quoted at Rs 1,311, surging by 5.70 percent, or adding Rs 70.70 in value to the stock on the BSE. Intraday, it has ranged between a high and a low of Rs 1,319.65 and Rs 1,281.90.

Meanwhile, the BSE Sensex was trading at 38,231.66, higher by 283.78 points or 0.75 percent at 11:00 AM. The NSE Nifty 50 was at 11,538.45, rising by 67.70 points, 0.59 percent.

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