Larsen & Toubro Limited Buyback 2018

Larsen and Toubro is a major technology, engineering, construction, manufacturing and financial services conglomerate, with global operations. L&T addresses critical needs in key sectors – Hydrocarbon, Infrastructure, Power, Process Industries, and Defence – for customers in over 30 countries around the world.

L&T is engaged in, core, high impact sectors of the economy and our integrated capabilities span the entire spectrum of ‘design to deliver’. With 8 decades of a strong, customer-focused approach and a continuous quest for world-class quality, we have unmatched expertise across Technology, Engineering, Construction, Infrastructure Projects and Manufacturing, and maintain a leadership in all our major lines of business.

Every aspect of L&T’s businesses is characterised by professionalism and high standards of corporate governance. Sustainability is embedded into our long-term strategy for growth.

The Company’s manufacturing footprint extends across eight countries in addition to India. L&T has several international offices and a supply chain that extends around the globe.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Oct 15 2018
Buyback Offer Amount: ₹ 9000 Cr
Date of Board Meeting approving the proposal: Aug 23 2018
Date of Public Announcement: Aug 23 2018
Buyback Offer Size: 4.29%
Buyback Number of Shares: 6,10,16,949
FV: 2
Buyback Price: ₹ 1475 Per Equity Share

Details of Buyback:

The Board of Directors of the Company has approved a proposal to Buyback up to 6,10,16,949 Equity Shares (Six Crore only) of the Company is 4.29% of the total paid up equity share capital, at a maximum price of Rs. 1475 (Rupees One Thousand Five Hundred only) per Equity Share (hereinafter referred to as the "Buyback Price") for an aggregate amount of Rs. 9000 crore (Rupees Nine Thousand crore only).

Shareholding Pattern Pre and Post buyback:

Category  No Equity Shares %
Financial Institutions / SUUTI 32,15,48,460 22.94
Foreign Institutional Investors 26,08,10,030 18.60
Foreign Nationals/NRI/OCBs etc. 1,36,60,342 .97
Shares underlying GDRs 2,65,39,111 1.89
Mutual Funds 20,60,15,229 14.69
Bodies Corporate 9,37,92,618 6.69
Directors & Relatives 15,43,530 0.11
L&T Employees Welfare Foundation 17,21,28,421 12.28
General Public 30,59,49,295 21.83
 Total 1,40,19,87,036 100.00

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Larsen and Toubro Buyback offer 2018 in demat or physical form as on the record date [15.10.2018]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [Not Announced Yet] by selling your shares through your broker on NSE or BSE. 3. Then on [Not Announced Yet], the payment will be given to you for accepted shares and unaccepted shares will be returned to your demat account.

Profit from the buyback on the bases of acceptance Ratio:

Buy 135 Shares at CMP of Rs.1245 [2,00,000/1475=135) as on 03.10.2018
Acceptance Ratio 33% 50% 75% 100%
(i) Amount Invested in Buyback 2,00,000 2,00,000 2,00,000 2,00,000
(ii) No. of Shares buyback 44 67 101 135
(iii) BuyBack Profit 10120 15410 23230 31050
(iv) Profit(%) 5.06% 7.75% 11.615% 15.525%

Recommendation:

Review and Recommendation of Larsen & Toubro Limited BuyBack by Investorzone team is: 4/10 [ Buying at CMP of 1359 is not advisable. Wait for the price somewhere around 1275 for better gains. ] Fair: 1-5 Good: 5-7 Excellent: 7-10  

Company Contact Details:

Larsen & Toubro Limited Secretarial Department L&T House, Ballard Estate Narottam Morarjee Marg Mumbai - 400 001, INDIA Tel: +91 22 6752 5656 Fax: +91 22 6752 5893 www.Larsentoubro.com

    I am holding 140 shares as on 15th Oct. being last date for buy back . Shall I be treated as small investor or not

      Please check the Market Price of Share on 15.10.2018 and multiply 140*Price of Share and if it is less than 2lakh you will be treated under Retail else not.

      The price was around 1216 on 15th Oct, you should be counted under the Retail category.

    Prima Facie the Acceptance Ratio looks poor for Cochin Shipyard.

    COCHIN SHIPYARD BUYBACK

    No. Of Shares= 43,95,610
    Price= Rs. 455
    Total AMount =200 Cr

    A Retail investor can buy 440 Shares( 2lakh/455) to participate in the buyback.

    As per Mar 18, the number of investors having shares between 1-500 are close to ~73 Lakh.
    The No. of Shares reserved for Retail Investor in Cochin Buyback is close ~6.60 Lakh.

    As per above figure the Acceptance Ratio would be 9%

      We may expect buyback pricing to be near the IPO Price. Last year Govt has done disinvestment of Shares at Rs. 431. Nowadays Govt is trying to achieve disinvestment targets via Buybacks. So the price may be near to IPO Price.

    I had 154 shares in demat account on 15/oct and bought 20 more (on record date = 15/0ct) . Now I am confused if I would be considered a retail investor or not. Please suggest

      I think they consider only based on stocks held in your DMAT account on the closing day. Since, you had only 150 on 15th closing day and rest 20 will go to DMAT after T+2 i.e 17th Oct, I think your count should only be considered 150 for buyback.
      However, yours is interesting story and I would like to know what is the final result. L&T will start sending emails regarding entitlement within a week time hopefully. So, please let us know once you receive email as how many count they have considered ?

      Don’t worry you will be counted under the Retail category. The no. of Shares on Record Date will be used as a criterion for buyback.

        Is it right that they send entitlement notices within a week.
        I haven’t received the entitlement mail for Redington yet.

        Kindly confirm if anyone has received the mail for redington

    Whether application to be submitted to L&T company? If so, where from the application can be downloaded? My broker told me to fill the application and submit to L&T through website.

      Please check your e-mail account. The Buyback forms are always sent to all eligible shareholders via email.

        Some of the brokers allow participating via their trading platforms itself and for others, investors can physically send their forms either to Registrar or Company directly.

        Other board members who have already participated in the buybacks can shed some more light into this.

          My broker is Sharekhan. I call my broker and tell them to put my Buyback request and they do it through their terminal. I never filled any physical form.

        If I applied for buyback then only they send me mail? If I am not applied for it then??

        How to apply for buyback by angel brocking application? Because there is no buyback option given in app (as like in zerodha).

          If you have shares in your account on record date, then only you will get email before opening of buyback date. Email will mention your share count on record date and no of shares you are entitled to offer.

      this is done to drive disinvestment drive by Govt

      Be very wary of these buybacks
      do strictest dilligence before investing in these kind of buybacks

    i have purchased 135 share yesterday.. and plan for sell today… then i am eligible for buyback….

      if you sell what will you tender.
      don’t sell now participate in buyback tender your shares and keep remaining shares for some time.
      in my opinion they will appreciate and touch 1500-1700 within 6-12 months

    I have purchased 35 shares of L&T today at 1224 for buy back in icici direct. is it consider for buy back as the settlement will be done T+2 basis hence shares will be credited in the dmat account on 15th. Please advise

      Yes you will be eligible.
      If you have purchased the shares today then shares will be in your demat on Monday(so eligible).

          To be eligible for buyback you should have company’s shares in your demat account on the Record date.

          Now depending upon the number of shares there are further two categories.

          1. General Category- Having Shares worth more than 2 lakh
          2. Retail Category- Having Shares worth less than 2 lakh

          The 2 lakh value is calculated as = No.of Shares* Price of Shares.

          This 2 lakh value is calculated on Record Date.

          P.S: As per SEBI, 15% of the total buyback is reserved for Retail Category.

    I have 140 share of larsen now ..i will sell 100 of 140 share on 16 octomber..so when the buyback process starts acceptence ratio will count on my 40 share or 140 shares??

        as an eg if acceptance ratio is 50% then i think you will only be able to tender 20
        @Marketwizard : kindly clarify this

        Also i would suggest you to hold on to your shares as market is nosediving now and in the rebound l&t will be major beneficiary due to its superb fundamentals

    I just purchased 300 sh at 1218 little knowing about this buyback offer. Am I eligible and how would I apply for it? I trade using ICICIdirect platform

      Also does the profit attract the capital gains tax (sold in less than a year?) how much is the tax calculated at?

      1218 * 300 = 365400

      considering price on monday is also 1218 the you will be considered under general category for which acceptance ratio will be less than 10%

      and i think gains from buyback are tax free(you can also view your tax due in ICICI direct also)

      YOU WILL BE ELIGIBLE BUT YOUR BUY BACK RATIO WILL BE 4.29% OF 300 SHARES SINCE YOU WILL NOT BE TERMED AS RETAIL INVESTOR WHO HOLDS THEN LESS RS 200000/- WORTH SHARES ON RECORD DATE. IT IS BETTER TO BRING THE HOLDING BELOW RS 200000/- TO HAVE A BETTER ACCEPTANCE RATIO. AS FOR TAXATION IT IS TAXABLE AS SHORT TERM CAPITAL GAINS

    Hi…I’ve about 270 shares of L&T purchased at average price of 917. Should I stay invested or participate in buyback.

    If I decide to go for buyback, I may not be eligible for Retail investor. How else can i participate.

      U can participate as non-retail investor. Though acceptance ratio could be 3-4 percent only.
      Only other alternative is that you sell 120 shares (or whatever makes u retailer) to decrease holding. Not recommended though.. In medium term, L&T is expected to touch 1700 (if market rebounds), so why to worry buyback.

      Pramodji’s answer has covered all your query, adding my 2 cents. You can split your holding into two demat account that way you can be eligible for retail category.

        no

        Eligibility is decided not per demat but per PAN(so 2 demats with same pan won’t help)

      you will be considered under general category for which acceptance ratio will be very less
      So holding or participating won’t be a much of difference to you.

      If you need some capital then participate otherwise stay invested

    Good price movement today in L&T. Hope market remains bullish till Record date so that AR gets improve and all the board members of this group earn handsomely.

    NLC Buyback | NLC board approves buyback of 9.28% shares of co worth up to Rs 1,249 cr at Rs. 88. The CMP is 72.

      no benefit now(cmp is 82)

      if price comes closer to 70-75 then it will be fair opportunity for buyback purposes(even then investors will fear as that slump will only be due to increase volatility in market)

    I have 150 shares of L&T. I want to confirm whether I shall be eligible for the reservation for small shareholders upto Rs.200,000/- My understanding is that the rate on the record date is used for calculating the value of Rs.200,000/- Kindly confirm. Thanks

      Yes, you are correct. 2,00,000/150= 1333. So if the price of shares remains less than 1333 on Record date you will be count under Retail Category.

        To be on safer side , track L&T share price and if required sell 5-10 shares to remain as retail investor ( Less than 2 Lac_ category).

          one question

          If closing share price on 15th(monday) is 1340 and vipul sells say 10 shares on monday
          will he be considered in retail or not

          would shares debit on same day and his demat holdng decreases from 150 to 140 or it stays 150 on monday and becomes 140 only after t+2

    Hi,
    I’m a new investor to stock market.I started to do trading 1 week before.I saw about this buyback and i wanted to do this.

    1 query for me is that how many shares will they buy if I have 40 shares.what is the number of shares to tender to get all the shares got selected in buyback.

    Please guide me.
    This calculation will be helpful for me to do buyback in other stocks too.

      My only request to all the board members here is whosoever is buying L&T please buy thinking in mind for the purpose of Investment only at this stage and on top of that if say 20% got accepted in buyback than it would be icing on the cake.

    *L&T Complete BUYBACK Plan*

    Record Date: 15-Oct-2018 (you have to buy stocks before 10-Oct-2018)

    Max Shares to Invest: 135 Shares
    Current Market Price: 1227
    BuyBack Price: 1475
    Profit per share= 1475-1227= Rs.248/Per share

    *Assume that after buyback you sold rest shares on your Cost price*

    Now see Acceptance Ratio Analaysis

    *If Acceptance Ratio 33%*
    Amount Invested(1227×135)= 165645
    No of share BB= 45
    BB Profit= 11048.4
    Profit %= 6.67%

    *If Acceptance Ratio 50%*
    Amount Invested(1227×135)= 165645
    No of share BB= 68
    BB Profit= 16740
    Profit %= 10.11%

    *If Acceptance Ratio 75%*
    Amount Invested(1227×135)= 165645
    No of share BB= 101
    BB Profit= 25110
    Profit %= 15.16%

    *If Acceptance Ratio 100%*
    Amount Invested(1227×135)= 165645
    No of share BB= 135
    BB Profit= 33480
    Profit %= 20.21%

    *Holding Period may be from 2 to 3 Months*
    Subject to Selling the rest stocks which was not accepted in Buyback selling at Cost price.

    *consult your financial advisor before making any investment decisions*

    👆🙏🙏

    How the category of retail investor is determined, is it the record date value of less than 2 lakh or actual buyback date. Please let me know.

    Hi Market Wizard,
    U r always a hope for all kind of investers, whether starters,rookies or champions.
    Pls helpme in one query that for which I am little worry to book lose on L&T part.
    Query:-
    I baought L&T today @ 1260 # 200 shares keeping in intraday part in my mind , where in today share closed at <1230 should I hold it or just book lose and invest somewhere else.
    Pls reply.
    Akash Shukla

      First of all, if that was an Intraday call you should have placed a STOP loss and exited once it hits. This is a common problem with many investors and in behavioral financing, we called it ” Loss Aversion Bias”.

      Nevertheless, I think in my point of view Friday was indeed a Black Friday of Indian Stock Market and all the stocks received hammering. In coming days NIfty should give bounce back from these levels as RBI Policy of not raising interest rates further will give a boost to Equity market and that would be a good opportunity for you to exit your position.

      Conclusion: Always be clear in your mind with regard to Trade. If it is Intraday, exit your position on the same day and if it is an investment then don’t look at the price on a daily basis.

      The situation is getting trickier now. As the market is falling like nine pins more and more people will vie for buyback which ultimately reduces the Acceptance Ratio. The ray of hope is if the market starts an upward journey than the shares which do not get tendered can be sell in the market at a higher price thereby gaining from the buyback.

      I think at CMP the L&T can be averaged but you have to think beyond buyback now. The current market buying should be like an Investor who is ready to give another 6-12 months to L&T, the number of shares tendered in buyback would be icing on the cake.

      Hope you got your answer.

    I can not able to start Application, is there any problem in app???
    Or please suggest me what should I do????

    hello Market wizard,
    please suggest me that i m having L & T share to my demat account of 75 shares @1351. So i can eligible to participate in buyback

        thank you so much or sir can i add some more share in that for 135shares which can acceptable for 100% is that good for me to do or i dont do anything just i give it to buyback?? what is your suggestion sir??

          You will not be counted under Retail Category. You can tender your shares in the General Category. At this point of juncture, it is quite hard to predict the exact Acceptance Ratio.

    as i am a retail investor and wish to participate in L&T buyback offer. i wanted to know that weather Rs.200000/- is calculated as per the buyback price or the closing price on record date. because if the closing price on record date is less than the buyback price then we can buy more shares and can increase our profit….

      It is calculated on the basis of Record date only. But as a safety measure, we always recommend buying at buyback price.

        but if it is calculated on the basis of record date then we can buy more quantity and can have more acceptance ratio …..

          Yes, you can definitely buy more…. But need to understand one analogy…..

          If Share price moves closer to Buyback price the Acceptance Ratio increase and vice-versa.

          So the price of share falling is bad for the investors as more people will buy the shares for buyback and ultimately the A.R reduces.

    Good price movement in L&T today despite weak market.
    #Buybackdateannoucementeffect

      Can we buy LT future at 1260 and expect to sell near 1475 by 15th Oct ? I did something similar in TCS buyback and it worked.

        The market is in the serious grip of bears. The investors usually buy in buyback to gain something extra when opportunities in the market are short. The TCS case was more of when the market was booming like there is no tomorrow. However, the situation is completely changed now. The Market has tons of opportunities to buy from where more gain is possible in near term if the market changes its direction. So will this strategy will work again looks hard.

    *Larsen and Toubro*
    *Buy – Back*
    The Buyback Committee at its Meeting held today has also fixed the specific price of Buyback of Equity Shares at Rs. 1475 (Rupess One Thousand Four Hundred and Seventy Five only). Accordingly, the Company will Buyback upto 6,10,16,949 equity shares at a price of Rs.1475/- per Equity Share, aggregating to a total consideration not exceeding Rs. 9000 crore.

    Pursuant to Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 9(i) of the SEBI (Buyback of Securities)Regulations 2018 (“Buyback Regulations”), we would like to inform you that the Company has fixed Monday, October 15, 2018 as the Record Date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the buyback offer of the Company.

    View : Positive
    UPSIDE % = 18.50 % ( difference between Buy-Back price and CMP – Rs.1244.5)

    Public holding up to Rs.2Lacs = 19.35% = 26,57,78,341 equity shares
    CMP = Rs.1244.45 per share
    MARKET CAP = Rs. 174470.28 crore
    *BUY – BACK Price = Rs1475 per share*
    Buy Back of Shares = 6,10,16,949 Equity Shares (Six Crore only) of the Company
    Route : Tender offer
    Retail Acceptance ratio = 3% (higher probability 20%)
    Overall Acceptance ratio= 4%
    Total Buyback size : Rs 9000 Crores

      1 query

      =========
      Public holding up to Rs.2Lacs = 19.35% = 26,57,78,341 equity shares
      Buy Back of Shares = 6,10,16,949 Equity Shares (Six Crore only) of the Company

      acceptance ratio should be 6,10,16,949/26,57,78,341(approx 25 %)

      ======================
      How did you arrived at 3 %

      Kindly excuse if i missed something obvious as i am new to the market and trying to learn from experts like you.

    Guys, we have to very careful with the L&T buyback. The price has gone down considerably in the last 30 days which will entice many people to buy from the point of view of buyback resulting in low Acceptance Ratio.

    The market condition is very poor. The prices of all the good stocks are taking a beating in the market and L&T won’t be an exception. So accordingly plan your startegy.

      i have bought the shares(avg price(rs 1278)) for buyback(approx 1.8 lakhs value)
      after reading your comments i have come t realise that acceptance ration will be very low(15-20%)

      Now kindly advise if i should sell once it reaches the cost price or should i wait for the buyback and then sell the remaining shares or just keep the remaining shares as an investment(is this a good proce to stay invested in L&T( I CONSIDER IT TO BE VERY GOOD STOCK BUT NOT SURE ABOUT THE PRICE)

      2) i have mphasis as well 50k(average price around 1200) now should i buy more or stop
      3) i have redington as well(avg proce is rs 100), should i keep the shares post buyback or sell them and cover my loss

      Thanks to advise on this

      NOTE : kindly keep in mind that i have no urgent need of capital and i have steady source of income and i can easily stay invested without any problem

        First of all, I would like to say one thing that changed market dynamics have made the situation very tough for buyback. The price of shares falling attracts more investor towards buyback thinking they can sell at high making life of Acceptance ratio tough. Had market not enter into the bearish mode the L&T stock must have been above 1400 and you must be taking pride in your decision to invest in the buyback. However, as the situation turned against makes you a little bit worried which is natural for any investor. Now coming back to your question:

        1. Actually saying anything at this stage is quite difficult because of the market condition. But better to exit if it comes close to your price as the market is full of opportunities because of the meltdown of NIFTY.

        2. Don’t buy Mphasis anymore now. There is a rumor in the market that results won’t be good for the company. The results are scheduled on 17.10.2018, so just wait for the results before making any position. However, the rumor may or may not be true but the way the share price is falling something is not good in the share which we don’t know but the market is.

        3. Redington, you can sell near your average buying price.

        Note:
        Judging anything at this stage is quite difficult due to market condition. IF dollar and Oil cool down then we can see sharp recovery in the market and all the dynamics will change suddenly. The only thing I can say is a lot of better opportunity are available in the market to invest than a buyback.

          Will it be wise to exit l&t and then invest in others due to nifty meltdown
          Can we talk on 954044402.5 or whatsapp to discuss the opprtunities

          Please if you can remain invested in L&T then there is no harm as well as many brokerage houses are bullish in this counter.

            thanks for the answer

            Redington is not moving up inspite of strong fundamentals(as per your analysis), so is it advisable to sell at MP after participating in buyback or keep the remaining shares as investment or would you advise to sell them at CMP and cut my losses and invest the money elsewhere(can you suggest any stock)
            Mphasis i have stopped buying,i have decided to stay invested in l&t

    Larsen and Toubro Buyback updates
    we would like to inform you that the Company has fixed Monday, October 15, 2018 as the Record Date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the buyback offer of the Company.
    The Buyback Committee at its Meeting held today has also fixed the specific price of Buyback of Equity Shares at Rs. 1475 (Rupees One Thousand Four Hundred and Seventy Five only). Accordingly, the Company will *Buyback* upto 6,10,16,949 equity shares at a price
    of Rs. *1475/-* per Equity Share, aggregating to a total consideration not exceeding Rs. 9000 Crore.

    Changes in the Buyback of L&T

    1. The Number of Shares has been increased from 6,00,00,000 Shares to 6,10,16,949 Shares.
    2. The Buyback Amount remains the same. i.e. 9000 Cr
    3. The Price of Buyback has been reduced accordingly from Rs.1500 to Rs.1475.

    L&T record date for buy back 15 oct and price 1475.
    Earlier may be announced 1500

    Hello,

    There is a rumour in the market that L&T may cancel buyback offer and that’s why is it going down so much?? Is it possible for a company to cancel buyback once announced publicly??

      Mr. Jay, the entire market is down due to the crisis of ILFS, rising crude, rising dollar, in short, the Indian Economy is going through tough times. The Market is expecting another rate hike coming week which will put a break to growth and hence negative for the market.

      Coming back to your question it is very highly unlikely that L&T will cancel a buyback being such a reputed company. The stock price fall is imminent in the market as all the shares of the big and small companies are down.

      In my point of view, everyone should take this fall in the market to accumulate their favorite stocks as such opportunities are rare in the market. However, the buying should be staggered because the market will hardly move from here on until election next year. In between, we may see ups and downs in the market. So the next 6 month is very crucial for the market.

      Buyback has to be approved by Special Resolution. If the number of votes in favor are more than 3 times the votes in disagreement the resolution will go through. The voting results should be available by end of the day on 3rd Oct 2018.
      So Wait for result of the Postal Ballot.

      A company of the Stature like L&T ..cancelling a buyback looks a remote possibility. Today or tomorrow there may be ballot result

      Buy in a staggered way. The market condition is not good. So buy on dips should be the strategy.

    What is expected acceptance ratio for lnt buy back . And when is the expected date of closure of this whole procedure

    T D POWER SYSTEMS
    Buyback upto 30cr at Rs 256/sh (80% prem)

    At 256/sh: Can buy 11.7lkh shrs
    If they buy for eg at an avg of 200/sh; they can buy 15lkh shrs
    Hence atleast 3.5% to 4.5% shares extinguished

    GOING BY ANNEXURE-A
    Promoters won’t participate

    Finally +Ve intent!! (Twitter)

      But i think td power system is not through tender route and only through open market.
      Hence may not make sense for retail investor to buy

    I have 501 shares of L&T, how many shares I can offer as the value comes to more than 2lacs I will not fall under retail. Kindly guide me.

      1. Firstly, you will not be counted under the ” Retail category” with 501 shares in your kitty unless the price of a share fell to Rs. 400 which is highly unlikely. However, you can offer your shares in the ” General category”.

      2 . Please tell me at what price you have bought these shares so that strategy can be made.

        Dear Wizard
        200 bought in 2013 @ Rs.700then received 100 as bonus, 34 bought in 2017 @ Rs.1752 totaling to 334 then received bonus 167 thus became 501.

          You will be eligible to tender your shares in “General category” only or you have to reduce your holding to be eligible for retail. However, if you dont need money then there is no harm what so ever in holding L&T. Incoming 6-12 months you may find the price to be in the range of Rs.1800-2000.

    *Kiocl buyback*
    Buyback size – 1,25,88,235 shares
    Buyback price – 170/-
    Buyback size – Rs. 214 crore

    👉Mphasis buyback record date may come October first or second week

    👉L&T buyback record date may come October second or third week

    👉Redington buyback records date 28 September

      Thats means record date would be at the end of september month.

    Just dial- No postal ballout notice yet….So Record date atleast 30 days away.Same with mphasis and L and T.

    Meanwhile ,DB corp Buyback got settled today. Final acceptance ratio around 43%

    Dear Sir,

    I have 470 shares of L&T as a result ESOP, Market purchases and a bonus issue. Please let me know whether I should opt for buyback or not? Frankly speaking I do not want to subscribe, but I am no expert either. My idea is to keep these shares as a reserve for something unexpected later.

      If you are a long-term investor then there is need to tender your shares in the buyback. The L&T is a portfolio stock. As per different brokerage houses report the share will easily reach 2000 level in coming 6 months time. So I think you keep shares in your portfolio.

    I think experts are missing a major point!!
    Retailers are not holding 26.57Cr, it is by the people who have less than 200000 at capital price i.e. people having less than 1L shares if the share face value is Rs 2/-.
    So it includes lot of HNI and people like Jhunjhunwala, who have bought in personal capacity.
    Retail is considered as the people who have less than 200000 market value on record date. Assuming, if closing value on record date is 1385, any one having more than 144 shares would not be considered as retail.
    Also, retailers with such small size are not much active and therefore, in retail I assume an acceptance of minimum 30-40%.

      You are correct Sumit ji!! I think to be on the safer side if we assume the price of Rs. 1500 on the Record date, then anyone having shares above 133 would not ideally be retail investors. Now as we don’t have a record of people having shares less than 133 to exactly calculate acceptance ratio, the only way to calculate is to go through Annual Report and see a shareholding pattern, in Annual Report they have mentioned that up to March 2018, the record of people having shares between 0-500 are 8,43,110 having 8,16,30,062 Shares. So if we assume till Record date, more people will buy shares to participate and be assuming 5 cr shares are held up by retailers as on record date and again assuming 50% will participate, the acceptance ratio should be around 30-40%.

      I do not think sumitji is right.
      However, the math for 26 crore shares held by retail category also does.not work out correctly.
      As i pointed out elsew here, icici has in its report given buyback ratio for retail as 11%

        26 Cr Shares are held up by 886510 no. of individuals having no. of shares in the range of 0-100000. Individuals can be anything. For example
        XYZ having 10 shares
        ABC having 100 Shares
        X having 3000 Shares
        Y having 5000 Shares.
        T having shares 120
        etc.
        Sum of shares of (XYZ, ABC, X, Y T, etc) is 26 Cr.
        Now in the above example, T is the only Retail Investor as it is holding shares less than 130.

        Adesh ji,
        ICICI is probably talking about the general or non-retail for 11%.
        Seeing the size it have to be minimum 50%, also there has been no Euphoria, which is good!!

    L&T buyback acceptance ratio will be so low that post it even 1% fall below buying price will get losses to buyers at cmp
    eg gain of 10% on 10 % share (assuming more then double shares will get bought) give only cushion of only 1% for rest 90% shares

    mind you only 4.5% is what company intends to buy

    if you buy 100 shares @1350 and 10 shares will fetch you 1500 resulting in cost of remaining 90 shares 1333.30

    so buying for participating in offer doesn’t make sense as stock has already rallied from rs 1250 to rs 1350

    ownership of minority shareholders
    infy 6%
    tcs 3 %
    whereas L&T is 20%

      Agreed dineshji. Well written. The only rider i will add is that the company is a good one and even at 1350 is below its 5yr avg PE.
      Also it is a good stock to own even if buyback is 15-20% in retail( my estimate).
      There are abt 25 crore shares held by retail category shareholders and only 90 lac shares in retail will be bought back.
      I assume many of them are really long term investors and do not expect more than 30% to participate in the buyback.
      Even then abt 6-7 crore shares will be tendered, so we may get only abt 15-20% buyback ratio

      As an additional comment, i just read an icici report which states that acceptance ratio for l &T will work out to 11% in retail category. They have not explained how, though