Larsen & Toubro, the largest engineering company in India, will make its second attempt in four years to repurchase shares worth £1 billion. The 33 million shares of L&T with a face value of Rs 2 each would be repurchased by the company's board at a maximum price of Rs 3,000 per share, giving investors a significant return on their investment.
L&T was forced to abandon its £900 million share buyback plan in 2019 after Sebi disapproved it for breaking regulations. It will be the company's first such capital dividend to shareholders since it went public in 1950 if the share buyback program is successfully completed this time. This is the largest share repurchase announcement of this year till date, according to Prime Database. Excluding L&T, boards of eight companies have approved share buyback proposals ranging from £ 1.8 million to 50 million so far this year, the research firm said. The engineering major’s buyback programme comprises 2. 4% of its paid-up equity.
L&T CFO Shankar Raman said the company will announce the final buyback price after obtaining shareholder approval. Rules allow L&T to offer a price beyond the upper band (Rs 3,000), he said. The CFO said that after the company’s previous buyback experience, it had worked with Sebi to make the guidelines clearer.