L&T increases share buyback offer price to Rs 3,200
Further, the Board has also approved to reduce the number of shares to be bought back from investors to 3.12 crore, which represents 2.22% of equity. The company had earlier proposed to buy back about 3.33 crore shares.
L7T has fixed September 12 as the record date for its Rs 10,000 crore buyback, which will be done through the tender route.
The record date will determine the number of shareholders who will be eligible to participate in the buyback.
The company has recently received shareholders approval for the same.
This is the first buyback announced by the company since the listing.
The amount required by the company for the buyback is intended to be met out of current surplus or cash balances or cash available from internal accruals.
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.
Analysts say L&T is back on the path of ROE enhancement, with buyback and dividend to raise its ROE 89 basis points.
CLSA said FY24's buyback of the company will not be the last.
The brokerage reiterated its buy rating on the stock with a target price of Rs 3,080, betting on five megatrends of urbanization, climate change, mobility, digital and societal change/sustainability.
«L&T is maintaining a balance of building its core businesses, divesting defocused businesses and returning surplus cash. Hyderabad Metro and delayed M&A deals are risks,» it said.
On Monday, L&T shares closed 0.18% lower at Rs 2,896.50 on NSE.
