Pursuant to the changes in direct tax rates, buyback of shares by the companies gained a momentum to return money to shareholders. In the last couple of years, lot of listed companies opted for Buyback of its equity shares.
Generally, Buyback is opted by the Company when they feel intrinsic value of the company is above the trading price of its equity shares and hence, it will be accretive for the shareholders of the Company to reduce the paid-up number of equity shares. In this article, we will discuss two buybacks; one which is successfully over and other one which is proposed [re-proposed) after denial by the Securities Exchange Board of India (SEBI) in 2019.
Larsen & Toubro Limited (L&T)
On 25th July 2023, Board of Directors of India's one of the Infrastructure to Information Technology conglomerate, Larsen & Toubro Limited ("L&T") proposed a buyback of 3,33,33,333 equity shares of INR 2 each (representing 2.4% of the total paid-up capital) at a maximum price of up to INR 3000 per equity share via tender offer route through stock exchange mechanism. This entails cumulative outflow of INR 10,000 crore. If successful, this will be its first maiden Buyback by L&T. The current market price of L&T stands in the range of INR 25002600 per share.
Interestingly, in 2018, L&T attempted its first buyback which was rejected by SEBI on account of consolidated debt to paid up capital & free reserve ratio exceeding two times. The buyback offers that time was for 6,10,16,949 (representing 4.29% of that time paid-up equity shares) equity shares at price of INR 1475 per equity share aggregating to INR 9000 crore.
Esta historia es de la edición August 2023 de M & A Critique.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición August 2023 de M & A Critique.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Cement Sector Consolidation Continues: Orient Cement to be acquired by Adani Group's Ambuja Cement
The shopping spree for the Adani group seems to be unstoppable. Recently, Adani group announced yet another acquisition in the cement space. This time it is Orient Cement Limited.
ITAT held that the reserve created on amalgamation is capital in nature and not taxable as perquisite
Recently, the Income Tax Appellate Tribunal, Mumbai held that the reserve created on amalgamation is capital in nature and not taxable as perquisite.
Mega Consolidation: SeQuent Scientific and Viyash Lifesciences backed by PE Carlyle Group
SeQuent Scientific Limited announced a merger which is expected to create a unique & differentiated platform with leading market position in Animal healthcare segment.
Raymond Group continues Segregation of its Business Verticals
After successful demerger of \"Lifestyle Business,\" Raymond Limited announced yet another restructuring to unlock further value for stakeholders.
Ultratech Cements adds India Cement in its shopping cart
India's Cement Industry is poised for consolidation. In recent past we have seen multiple large & small acquisitions in cement segment for consolidating positions.
Valor Estate Limited: "Diversification" to "Sepration" of Hospitality Business
“From investments in hospitality business, the demerger transaction will enable VEL to start its construction in hospitality”
SIEMENS Energy to be a separate entity in alignment with global strategy
Siemens AG announced its Vision 2020+ which included the spin-off of its Gas & Power [G&P) i.e., Energy Business into Siemens Energy.
Arvind Group separates its Advanced Material Business for independent growth trajectory
Advanced Material Business (AMD) of Arvind Limited focuses on advanced materials and caters to customer needs across the textile value chain, including specialty yarns, fabrics, and ready-made products.
Merger for bail-out from debt obligation
Ind Swift Limited (herein after also referred to as 'ISL' or 'Transferor Company') is engaged in the business of manufacturing of Pharmaceutical Products.
Batliboi Ltd. merging its associate company
Batliboi Limited has a history of collaborations with various foreign technical partners and has subsidiaries like Hydraulic & General Engineers Ltd. and Batliboi International Ltd. In March 2024, the board of Directors of Batliboi Limited accorded their approval for the merger of promoter owned private company with itself.
