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Published: September 14, 2023
Updated: September 14, 2023

L&T's Shares Surge to New Heights with Buyback Price Boost

Engineering giant, Larsen & Toubro (L&T), breaks new ground with an enticing buyback offer.

Opening Gains:

L&T's shares opened strong at ₹2,954.05 per share on the BSE, creating a buzz among investors on a sunny Tuesday morning. The stock saw a remarkable 3.6% surge, hitting a fresh 52-week high, thanks to a significant announcement.

Enhancing Share Buyback:

In a strategic move, L&T increased its buyback price from ₹3,000 to ₹3,200, reflecting its commitment to delivering value to shareholders. This bold step aims to sweeten the deal for public shareholders and bolster the company's equity capital.

Revised Buyback Details:

L&T also fine-tuned its buyback plan by reducing the maximum number of shares to be repurchased from 3.33 crore to 3.12 crore. This adjustment now represents 2.22% of the equity capital, aligning with the company's long-term goals.

Lakshya '26:

A Vision for Growth L&T's strategic plan, Lakshya '26, has two central pillars: improving return on equity (ROE) and maximizing shareholder value. This buyback aligns perfectly with these objectives, marking a historic moment as L&T's first-ever share repurchase offer.

Shareholders React:

Initially announced at ₹3,000 per share, the buyback offer represented a substantial 17% premium over the market price at the time, which was ₹2,562. However, the stock has since rallied impressively, diminishing this premium and lowering the likelihood of shareholder participation. In September alone, L&T's stock has surged by an impressive 10%.

At Monday's closing price of ₹2,894, the original buyback offer boasted just a 3.7% premium. This upward revision in the buyback price aims to rekindle enthusiasm among public shareholders.

Experts suggests that L&T's stock price has experienced a robust gap-up opening after the buyback news. While the bias remains positive and extended targets of ₹3,100 are conceivable, fresh long positions should be approached with caution due to overbought conditions. Any dips toward ₹2,900 may present buying opportunities.

A Stellar Year

According to Trendlyne data, L&T's stock price has demonstrated remarkable strength, surging by 51.4% in the past year and outperforming its sector by 0.1%.

L&T's strategic move to boost its buyback price is poised to make a significant impact, underlining its commitment to shareholders and its pursuit of enhanced return on equity. The company's stock has rallied impressively, creating an enticing proposition for investors. As the market watches these developments closely, L&T's journey continues to be one to watch.