L&T share buyback will be fully subscribed: CFO Raman
buyback of shares will be fully subscribed as it offers shareholders around 15% premium to the market price, chief financial officer R. Shankar Raman told Mint in an interview. “If you look at various offers that have been put out, they've been between 15 and 20% premium and our assessment of the market is that it is around 15% premium.
It's not a number but around that could go well. This premium for people will encourage investors to participate and the premium should be sufficient... even if they want to participate in the buyback and then come back to own the stock later from the open market...
they still should have an opportunity to do that," Raman said. The construction major earlier this week proposed to buy back shares worth as much as ₹10,000 crore at a maximum price of ₹3,000 per share. L&T aims to repurchase 33.33 million shares, or 2.4% of outstanding stock, from the public through a book-building process.
On Thursday, L&T shares closed around ₹2,662 on the BSE, up 0.6% from the previous close. “We've now set the approval process for shareholders in motion and will provide 30 days for their approval... My sense is that I'm reasonably confident as a person representing L&T that the shareholders will find value," he added.
L&T made the buyback announcement alongside the release of its quarterly earnings. In Q1, revenues from L&T’s core business—project and manufacturing—rose 49% year-on-year to ₹32,718 crore, aided by improved execution across segments. Further, order inflows from this segment jumped 80% y-o-y to almost ₹50,400 crore buoyed by the Mumbai-Ahmedabad High Speed Rail project contract.
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