On Tuesday, engineering and construction major Larsen and Toubro announced a Rs 10,000 crore in share buyback. They said its board had declared a special dividend of Rs 6 per share for FY23.

The company said it would buyback of 3,33,33,333 of its fully paid-up equity shares with a face value of Rs 2 each from the members of the company at Rs 3,000, a premium of more than 17% to the July 25 closing price of Rs 2,561.95.

L&T said, “The board of directors has approved a proposal to buyback through the tender offer route equity shares of the company for an aggregate amount not exceeding Rs 10,000 crore (excluding tax on buyback). The proposal is subject to the approval of shareholders,”

The buyback is subject to the Securities Exchange Board of India (SEBI) approval.

SEBI had denied the company’s previous attempt to buyback the share of around Rs 9,000 crore in 2019.

The regulator had said, “Since the ratio of the aggregate of secured and unsecured debts owned by the company after buyback (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the company based on consolidated financial statements…, the buyback offer is not in compliance with Section 68(2)(d) of Companies Act, 2013 and Regulation 4(ii) of Sebi (Buyback Securities) Regulations, 2018,”

Since then, SEBI has amended its buyback norms for companies that have non-bank financial companies (NBFCs) or housing finance companies as their subsidiaries.

As part of SEBI’s amendments, companies like L&T would be eligible for buyback if the aggregate of secured and unsecured debts owed by it to the paid-up capital and free reserves after buyback is less than 2:1 on both standalone and consolidated basis, excluding the kind of subsidiaries it mentioned.