Shares of Larsen & Toubro opened nearly 4% higher and hit a record high of Rs 2,997.75 on September 12, a day after the company raised its floor price by nearly 7%. Previously, the floor price was fixed at Rs 3,000/share. The floor price revision comes after the L&T share price increased since the buyback program was announced on July 25. L&T shares have risen nearly 15% since then to hit its previous high of 2,928, 70 Rs. The previous floor price gave investors only a 3.7% premium over Monday’s closing price of Rs 2,894.20. The new floor price is nearly 11% higher than Monday’s closing price. Today, September 12, was also a record day for buyback offer registration. This also attracted a large number of investors to the counter to qualify for redemption registration.
At 9:18 am, shares of Larsen & Toubro were trading 3.5 per cent higher at Rs 2,995.55 on the National Stock Exchange.
However, the exact opening and closing times for the buyback have not yet been announced. L&T management also said the acquisition is aimed at improving return on equity (RoE). R Shankar Raman, Whole-Time Director and Chief Financial Officer, L&T, said, “L&T is focused on improving Return on Equity (RoE). In fact, one of the key objectives of the company’s five-year strategic plan ‘Lakshya 2026’ is to maximize shareholder value through improved RoE.
“To successfully complete the proposed buyback plan, thereby achieving the RoE target and considering the current market sentiment, the company has decided to increase the buyback price,” Raman added.
This is also the second attempt in L&T’s history to offer a buyback after a failed attempt five years ago in 2018.
