The L&T board will review a proposal for a special dividend and its first-ever buyback

25 Jul 2023 , 12:14 PM

The Larsen & Toubro board will discuss suggestions for a special dividend and repurchase while it is meeting today to discuss Q1 results. If accepted, it would be L&T’s first repurchase offer.

Recall that in 2019, the company had proposed a proportionate tender offer route buyback of up to 6.10 crore shares from its equity shareholders as of the record date (October 15, 2018) at a price of Rs 1,475 per share, taking into account the debt-equity ratio requirement on the basis of standalone financial statements, post buyback.

However, the market regulator rejected its Rs 9,000 crore buyback offer. When rejecting the proposal, SEBI had stated: ‘The buyback offer is not in compliance with Section 68(2)(d) of the Companies Act, 2013 and Regulation 4(ii) of SEBI (Buy-back of Securities) Regulations, 2018 because the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back (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.’

In accordance with the most recent shareholding data as of June 30, mutual funds hold 17.46% of the equity, insurance companies 17.85% (of which LIC holds a major position of 11.19%), FPIs 24.2%, and retail investors 18.52%, and L&T employee trust 13.87%. 

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