Larsen & Toubro’s first-ever share buyback has received stupendous response, being subscribed 7.2 times, according to data on the National Stock Exchange. Against the 3.13 crore shares on offer, the company received offers for 22.55 core shares for a staggering ₹72,160 crore. The company had fixed the buyback size at just over ₹10,000 crore.
The original buyback price was ₹3,000 a share, which was subsequently raised to ₹3,200 a few days before the buyback programme opened. The buyback was open between September 18 and 25.
The bulk of the demand was from qualified institutional buyers, accounting for over 86 per cent of the subscriptions, according to data from both NSE and BSE. Under this, foreign institutional investors dominated the demand, followed by mutual funds.
Non-institutional investors accounted for less than 1 per cent of the bids, while individual investors were at 12.4 per cent.
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One of the main objectives of the company in initiating the buyback was to boost the return on equity to shareholders. Increasing the buyback price to sweeten the deal was to ensure that the buyback did go through as there have been instances in the past of poor responses to buybacks.
The prospects for the company look robust and on track to meet its 10-12 per cent order inflow growth in FY24 from the ₹2.3-lakh crore that it reported in FY23. Very recently it was the preferred contractor for Saudi Aramco’s $3.9-billion expansion project.
The shares of the company have appreciated 10 per cent over the last 30 days and 21.5 per cent over the last 90 days.