L&T Set to Initiate Historic Share Buyback and Special Dividend for FY24

L&T's Historic Share Buyback and Special Dividend Plans

Engineering and infrastructure giant Larsen & Toubro (L&T) is preparing to take a groundbreaking step in its corporate history by launching its first-ever share buyback and proposing a special dividend for FY24.

The company's board has scheduled a meeting on July 25 to seek approvals for these significant financial initiatives, representing a pivotal moment for L&T's shareholders and stakeholders.

The Path to L&T's Historic Share Buyback

In August 2018, L&T's board had initially approved a buyback plan, aiming to repurchase up to 4.29% of its paid-up equity capital, amounting to around Rs 9,000 crore.

However, the proposal faced regulatory hurdles, as the Securities and Exchange Board of India (SEBI) raised compliance issues and expressed concerns about the company's debt burden post-buyback. Consequently, L&T had to shelve its buyback plans at the time.

L&T's Robust Financial Performance and Growth Initiatives

Despite the challenges faced earlier, L&T has continued to demonstrate strong financial performance. For FY23, the company recorded a consolidated net profit of Rs 12,531 crore, marking an impressive 20.3% increase from the previous fiscal year.

In December 2022, L&T made significant strides towards its 'Lakshya 2026' roadmap by divesting a 51% stake in Infrastructure Development Projects. The company also has plans for certain strategic exits in FY24.

Capital Expenditure and Merger Plans

As part of its growth strategy, L&T has earmarked a capex of Rs 5,000 crore for FY24, with a focus on investments in a data center and an electrolyser plant. Additionally, the company's board has approved the merger of its wholly-owned subsidiary, L&T Innovation Campus (Chennai), with L&T Seawoods (LTSL).

This merger, subject to regulatory approvals, will lead to LTICCL and its subsidiaries becoming wholly-owned subsidiaries of LTSL.

L&T's Steadfast Commitment to Progress

L&T's decision to proceed with its share buyback and special dividend plans reflects the company's unwavering commitment to financial progress and value creation for its shareholders.

With a legacy spanning 85 years, L&T continues to be a formidable player in the engineering and infrastructure industry, positioning itself for a promising future through strategic initiatives and robust financial management.

Conclusion

Larsen & Toubro's (L&T) announcement to embark on its first-ever share buyback and propose a special dividend for FY24 marks a historic milestone in the company's illustrious 85-year journey.

After overcoming regulatory challenges in the past, L&T is now determined to pursue its strategic financial plans, showcasing its steadfast commitment to progress and value creation for its shareholders.

Despite previous hurdles, L&T's continued strong financial performance and growth initiatives have positioned the company as a prominent player in the engineering and infrastructure sector.

The successful divestment in Infrastructure Development Projects and plans for strategic exits in FY24 exemplify L&T's commitment to evolving with the times and driving sustainable growth.

With a dedicated focus on capital expenditure, including investments in a data center and an electrolyser plant, L&T is demonstrating its commitment to staying at the forefront of innovation and driving the company's expansion in alignment with its strategic roadmap, 'Lakshya 2026.'

The proposed merger of its subsidiary, L&T Innovation Campus (Chennai), with L&T Seawoods (LTSL) further reinforces L&T's proactive approach to optimizing its organizational structure and maximizing synergies for greater efficiency.