Shares of Larsen & Toubro jumped nearly 4 per cent in early trade on Tuesday and hit a record high of Rs 3,009 after the company raised the floor price of its Rs 10,000-crore mega-buyback programme by nearly 7 per cent to Rs 3,200 per share.
Earlier, the floor price was fixed at Rs 3,000 per share. The revision of the floor price came after a rise in L&T’s share price since the announcement of the buyback programme back on 25 July. Since then, shares of the engineering and infrastructure conglomerate have risen nearly 15 per cent to surpass its previous record high of Rs 2,928.70.
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The new floor price offers investors a premium of around 11 per cent on Monday’s closing price of Rs 2,894.20. The previous floor price offered a 3.7 per cent premium over Monday’s closing price.
At 11:00 AM, L&T shares were trading 81.85 points, or 2.83 per cent higher at Rs 2,976.05 per share.
The record date for subscribing to the buyback offer is 12 September. L&T has also reduced the maximum number of shares planned to be bought back from 3.33 crore to 3.12 crore, representing 2.22 per cent of the equity capital, L&T said in an exchange filing on Monday.
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"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 maximise shareholder value through improved RoE," said R Shankar Raman, Whole-Time Director and CFO, L&T.
"To successfully complete the proposed buyback plan, thereby realising its RoE objective, and considering the present market sentiments, the company has decided to increase the buyback price," he added.
L&T shares have surged over 42 per cent year-to-date and over 51 per cent in the last one year.
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