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Shares of Larsen & Toubro (L&T) surged on Tuesday, opening over 4 per cent higher to hit a 52-week high of Rs 3,009 on September 12.
At around 11:40 am, shares of L&T were trading 3.18 per cent higher at Rs 2,986.30 apiece on the National Stock Exchange (NSE).
The surge in the company’s shares comes after its decision to raise the floor price of its Rs 10,000-crore mega-buyback program by nearly 7 per cent, setting it at Rs 3,200 per share, up from the previous floor price of Rs 3,000 per share.
The revision in the floor price was prompted by the substantial increase in L&T’s share price since the announcement of the buyback program on July 25.
Since then, L&T’s shares have witnessed a 15 per cent surge, reaching a previous record high of Rs 2,928.70.
The earlier floor price had offered investors a modest 3.7 percent premium over Monday’s closing price of Rs 2,894.20. However, the new floor price provides a significantly higher premium of nearly 11 percent over the stock’s Monday closing price.
Notably, September 12 marked the record date for subscribing to the buyback offer, attracting a flurry of investors keen to become eligible for participation in the buyback.
While the exact timeline for the opening and closing of the buyback issue is yet to be announced, L&T’s management emphasized that the buyback was part of its strategy to enhance its return on equity (RoE).
R Shankar Raman, Whole-Time Director & CFO of L&T, stated, “L&T is focused on enhancing its Return on Equity (RoE). In fact, one of the core 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 realizing its RoE objective, and considering the present market sentiments, the company has decided to increase the buyback price,”
Raman further added.
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