NEW DELHI: Construction company Larsen & Toubro’s shares were trading more than 6 per cent in the green in the stock’s biggest daily gain in terms of percentage since October 2017.
The surge in the share price came after the company on Saturday said that it will consider a share buyback, withput specifying the amount.
“…this is to inform you that the Board of Directors will consider a proposal for buyback of equity shares of the Company, at its meeting to be held on Thursday, August 23, 2018,” the construction major said in a filing to the bourses.”
Share buyback is the re-acquisition by a company of its own stock.
If approved by the board, this will be the company’s first share buyback.
Ratings agency Morgan Stanley analysts believe buyback is “over and above the regular dividend and is tax efficient from a shareholder perspective”.
On Monday, the L&T stock opened with a 4.81 per cent gain at Rs 1,300 on the BSE and extended its lead in morning trade to hit the intra-day high of Rs 1,319.65. At 10.37 am, the stock was up 5.59 per cent at Rs 1,309.60. The broader market was up 0.75 per cent.
(With Reuters inputs)