In 2019, L&T had to drop its Rs 9,000-crore share buyback plan after Sebi rejected it for being non-compliant with rules. If the company successfully completes the share buyback programmethis time, it will be its first such capital distribution to shareholders since it got listed in 1950. This is the largest share repurchase announcement of this year till date, according to Prime Database. Excluding L&T, boards of eight companies have appro-ved share buyback proposals ranging from Rs 18 crore to Rs 500 crore in 2023, 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 willannounce 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.
Last time, Sebi directed L&T not to proceed with the buyback as its financial ratios would be adversely impacted after the implementation of the scheme and would not be compliant with rules. Raman said under the current guidelines, if the group has a non-banking finance company whose debt-to-equity ratio is under six, then its debt would be excluded from calculating the debt-to-equity ratio for the buyback.