Govt to tender shares in L&T buy back offer, to fetch Rs 7 bn to exchequer

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The government is likely to offer its shares in Larsen & Toubro's buy back offer, which is estimated to fetch about Rs 7 billion to the exchequer, an official said Thursday.

Infrastructure major Larsen & Toubro (L&T) has already approached market regulator Sebi seeking approval for launching a share buyback programme. The offer is likely to open soon.

"The government will participate in the buy back process. The shares would be tendered on proportionate basis," an official told PTI.

The government currently holds 1.8 per cent stake in L&T through the Specified Undertaking of the Unit Trust of India (SUUTI).

The share buy back price has been fixed at Rs 1,475 a piece.

"At this price the government is likely to get around Rs 7 billion by tendering shares in the buy back offer," the official said, adding over 4.9 million shares held by SUUTI in L&T are likely to be bought back.

When contacted, L&T spokesperson declined to comment on the story.

Shares of L&T closed at Rs 1,425.15, up 1.77 per cent over previous close on the BSE.

The government had sold 2.5 per cent stake in L&T held through SUUTI in 2017 through block deals in the market. After that, some portion of SUUTI holding in L&T has been transferred to Bharat-22 ETF.

The proceeds from buy back would help the government move forward in achieving the Rs 800 billion disinvestment target set for current fiscal.

The government has already mopped up over Rs 320 billion through minority stake sale in CPSEs and launching ETFs.