L&T approves Rs 10,000 crore share buyback at Rs 3,000/share

economictimes.indiatimes.com:

The buyback, to be done at a maximum price of Rs 3,000 per share, will involve 3.33 crore shares or 2.4% of the fully paid-up equity share capital. The buyback price is at a premium of 17% from the current levels. «The Board approved buyback of 3,33,33,333 of its fully paid-up equity shares of face value of Rs 2 each, from the members of the company at a maximum price of up to Rs 3,000 per equity share, subject to any increase to the buyback offer price as may be approved by the board, payable in cash for an aggregate consideration of up to Rs 10,000 crore,» the company said in a filing.

This is the first buyback announced by the company since the listing. The specific price at which the buyback will be executed may be determined by the Board soon. 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. The Board has also approved a special dividend of Rs 6 per share. The record date for the same is fixed on August 2 and it will be paid on or before August 14.

For the first quarter, the company's net profit rose 46% year-on-year to Rs 2,493 crore, while revenues increased 34% to Rs 47,882 crore. The company received orders worth Rs 65,520 crore at the group level during the June quarter, registering a strong year-on-year growth of 57%. The consolidated order book of the group is at Rs 4.12 lakh crore as of June, with international orders having a share of 29%.