L&T gains 3%; hits new high as board to mull buyback, special dividend

The civil construction major announced its board will meet on July 25 to consider share buyback and special dividend.

Shares of Larsen & Toubro (L&T) hit a new high of Rs 2,573, surging 3 per cent on the BSE in Friday’s intra-day trade in an otherwise weak market after the civil construction major announced that its board will meet on July 25 to consider share buyback and special dividend.

At 09:27 AM; L&T was quoting 2.8 per cent higher, as compared to 0.72 per cent decline in the S&P BSE Sensex. L&T on July 11, 2023 had informed that a meeting of board of directors will be held on Tuesday, July 25, 2023 to approve the unaudited financial results for the quarter ended June 30, 2023.

On Thursday after market hours, L&T announced that buyback of equity shares of the company and special dividend on equity shares for the financial year 2023-24 will also be considered by the board in the said meeting.

Special dividend if approved, the record date for the purpose of determining the entitlement of the equity shareholders for the said dividend shall be August 2, 2023, the company said. In November 2020, L&T had paid special dividend of Rs 18 per share to its equity shareholders.

Meanwhile, during financial year 2018-19, L&T had proposed a buyback of up to 61.02 million equity shares from its equity shareholders, on aproportionate basis by way of the tender offer route through the stock exchange mechanism at a price of Rs 1,475 per equity share, aggregating up to Rs 9,000 crore.

However, in January 2019, the market regulator the Securities Exchange Board of India (SEBI) advised the company not to proceed with the buyback offer since the ratio of the aggregate of secured and unsecured debts owed by the company and its subsidiaries after buyback (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the company based on consolidated financial statements of the company. Accordingly, the company decided not to proceed with the buyback.