Now Reading: L&T board to consider share buyback on 12 September
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L&T board to consider share buyback on 12 September
The board of Larsen & Toubro (L&T) will meet on 12 September to consider a proposal for buyback of its equity shares, the company said in a stock exchange filing on 27…
The board of Larsen & Toubro (L&T) will meet on 12 September to consider a proposal for buyback of its equity shares, the company said in a stock exchange filing on 27 August. The buyback, if approved, will be conducted from open market or through a tender offer, subject to regulatory and market conditions.
L&T last executed a buyback in 2020, returning Rs 900 crore to shareholders. Under the Companies Act, 2013, a company may buy back up to 25% of its paid-up capital and free reserves without a special resolution, provided its debt-equity ratio post buyback does not exceed 2:1.
The company ended the June quarter with consolidated debt of Rs 47,854 crore and net cash of Rs 5,300 crore from its IT and financial services arms. The buyback size and price will be finalised at the board meeting. The stock closed at Rs 3,450 on the BSE on 27 August, down 1.2% from the previous close.
Indian Opinion Analysis
The Larsen & Toubro (L&T) board will consider the proposal at its meeting on 12 September. The bye-law empowers the board to approve share buybacks of up to 25 percent of paid-up capital without a shareholder vote, provided the company meets solvency and debt-equity norms under the Companies Act. L&T had last bought back shares in 2020, spending Rs 900 crore. The buyback is seen as a capital-allocation signal: it returns cash to shareholders when the stock is trading near a 52-week low, even as the company pursues large order-book growth in infrastructure and defence. A buyback reduces the equity base and can lift earnings per share. The key figure to watch is the buyback size as a percentage of free reserves, which determines whether the board uses the full 25 percent limit.
Source: barandbench.com
This brief was synthesised by AI from the source linked above.
