The board of Larsen & Toubro Ltd (L&T) on Tuesday approved the buyback of equity shares of up to Rs 10,000 crore at Rs 3,000 per share through the tender offer route, which is nearly a 17 percent premium from the current levels. The Mumbai-headquartered company will buy back as many as 3.33 crore shares, representing 2.4 percent of the fully paid up equity share capital of the company.

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The specific price at which the buyback will be made may be determined by the Board/Committee, at an appropriate time, the company said in a BSE filing.

To recall, the engineering major's board back in August 2018 approved its first buyback in 80 years of the firm’s history, for up to 4.29 percent of its paid-up equity capital, aggregating to a value of about Rs 9,000 crore. The proposal was turned down by the capital markets regulator Sebi, citing compliance issues over its post-buyback debt-equity ratio.

Under a share buyback, the company buys back its own shares from shareholders and it is seen as a tax-efficient way to give cash back to investors. Share buyback reduces the number of shares available in the market and thereby increases the real value of the stock.

Co announces special dividend for FY24

Additionally, the board has also approved the special dividend of Rs 6 per share for fiscal FY24. If approved, the record date for the purpose of determining the entitlement of the equity shareholders for the said dividend would be Wednesday, August 2, L&T said.

"Special dividend of Rs 6 per equity share i.e. 300 percent on face value of Rs 2 each, for the financial year 2023-24. As informed earlier, the record date for the purpose of payment of dividend is Wednesday, August 2, 2023. This will be paid on or before August 14, 2023," according to the company statement.

L&T Q1 earnings

The engineering major recorded a net profit of Rs 2,493 crore, up 46 percent year-on-year. Consolidated revenue for the quarter was at Rs 47,882 crore, up 34 percent as against Rs 35,853 crore in the year-ago period.

The company's earnings before interest, tax, depreciation and amortisation or EBITDA came in at Rs 4,869 crore during the quarter under review. This is higher by 23 percent, compared to Rs 3,953 crore in the corresponding period of last fiscal.

EBITDA margin, meanwhile, came in at 10.2 percent, which is lower as compared to 11 percent in the corresponding quarter of the previous fiscal year.

Shares of L&T settled 1.54 percent lower at Rs 2,565 apiece on the NSE. On a year-to-date basis, the stock has gained 22.76 percent, while it has rallied 46.47 percent in the last one-year period.

First Published:Jul 25, 2023 4:55 PM IST