L&T Hikes Buyback Price To Rs 3,200 From Rs 3,000 Ahead Of Record Date: How To Apply

Larsen & Toubro (L&T) has made a huge revision in its buyback offer ahead of the record date on September 12. The infra giant has reduced its buyback size, however, hiked the floor price to Rs 3,200 per share from Rs 3,000 per share. The buyback size remains at Rs 10,000 crore. L&T shares traded volatile on Monday.

On BSE, the stock stood at Rs 2894.05 apiece, down by 0.3% on Monday. Last week, the stock had touched a new 52-week high of Rs 2,927.95 apiece.

Key highlights of L&T's Rs 10,000 Crore Buyback:

Buyback Size: As per the regulatory filing on September 11, the maximum number of Equity Shares proposed to be bought back by
the company has been reduced from over 3.33 crore fully paid-up equity shares to over 3.12 crore equity shares representing 2.22% of the total paid-up equity shares of the Company.

Buyback floor price: The buyback has been increased from Rs 3,000/- per Equity Share to Rs 3,200/- per Equity Share.

Record date: L&T fixed September 12, 2023, as the Record Date for the purpose of determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback.

Eligibility: L&T stated that all of the equity shareholders of the company as of Record Date will be eligible to participate in the Buyback, including holders of global depositary shares ("GDSs") of the Company, who cancel any of their GDSs and withdraw the underlying Equity Shares prior to the Record Date, such that they become equity shareholders of the Company as on the Record Date.

Objective: One of the key objectives of the Company's Strategic Plan, Lakshya '26, is to enhance the return on equity (ROE) and thereby maximise shareholder value. Return on equity capital to the shareholders in the form of a Buyback of shares of the Company is a step in that direction. Also, the objective of the buyback is to improve return on equity and maximize shareholder value.

Also, the company is following an asset-light business model and hence significant investments which may utilize surplus cash are not envisaged. Hence, it is proposed to undertake a buyback to increase shareholder value in the longer term and improve return on equity.

Managers: Companies like JM Financial and Axis Capital are the managers of the buyback, while KFin Technologies is the registrar.

Buy-back is a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than the market price. When it buys back, the number of shares outstanding in the market reduces.

How To Apply?

According to Chittorgarh's website, all the eligible Shareholders of the Company holding either Physical Shares or Demat Shares as of the Record Date can participate in the buyback offer through their Stock Broker.

Eligible shareholders holding L&T shares in demat form are required to inform their broker of the details of the Equity shares they desire to tender in the Buyback Offer. Notably, these shareholders will need to transfer the tendered shares to a Special account of the clearing corporation. In turn, the stock brokers would place an order on the stock exchange for the buyback.

On the other hand, shareholders who have L&T shares in physical form can also approach the stock brokers but with their broker with original share certificates and supporting documents. Once the documents are verified, the broker will place an order on the stock exchange and submit the original share certificate and TRS to the registrar.