L&T stock hits record high on reports of 100% retail acceptance in buyback

The Rs 10,000-crore buyback was subscribed 7.2 times (x), led by qualified institutional buyers (QIBs),

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Shares of Larsen & Toubro (L&T) rallied 2 percent to an all-time high of Rs 3,013 on the BSE ahead of the company’s share buyback bid settlement later on September 28.

Apart from settlement of bids, return of unaccepted equity shares, and payment of consideration to eligible shareholders who participated in the buyback will also take place. The S&P BSE Sensex traded flat at 66,071 as of 10:10am.

As per consensus on X, formerly Twitter, retail investors shared a 100 percent acceptance ratio (AR) in the buyback.

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The Rs 10,000-crore buyback was subscribed 7.2 times, led by qualified institutional buyers (QIBs), showed data on the NSE.

While QIBs accounted for over 86 percent of the subscriptions, non-institutional investors (NIIs) accounted for less than 1 percent of the bids, and individual investors were at 12.4 percent.

Against the 3.13 crore shares on the offer, the company received offers for 22.5 crore shares for Rs 72,160 crore.

In the past one month, the stock of this civil construction player has climbed 12 percent, as against a 2 percent rise in Sensex.

The maximum price for the share buyback was set at Rs 3,200 apiece, which is at a 5.4 percent premium to Thursday’s high. One of the major objectives of the company to initiate the buyback was to bolster return on equity to shareholders, thereby maximising the shareholder value.

Analysts at UBS has shared a 'buy' rating on the counter, raising target price to Rs 3,600 per share from Rs 3,040 per share.

"The new strategy ensures L&T's appetite for consistent new order growth and ensures expansion opportunities outside domestic market. We expect the company to record healthy 17/32 percent compounded annual growth rate (CAGR) in core sales/EPS in FY23-26. The cyclical earnings momentum, coupled with improving capital allocation makes L&T a better play," the brokerage firm added.

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