Larsen & Toubro's Rs 7,500-crore financing will be used to refinance debt maturing in the next financial year, Chief Financial Officer R. Shankar Raman said on Wednesday.
The board of directors of an engineering conglomerate is long term loan Up to Rs 7,500 crore will be disbursed, including through external commercial borrowings, term loans, non-convertible debentures or other suitable instruments, according to an exchange filing on Tuesday. The development comes after it spent Rs 10,000 crore on share buybacks last year.
„This financing is aimed at refinancing the debt maturing in FY25 within the current overall debt balance,“ Raman told NDTV Profit on Wednesday. “The debt-to-equity ratio will remain the same as it is now, around 0.30:1.”
L&T's consolidated total debt-to-equity ratio as of December 2023 is 1.23, compared to 1.14 as of March 2023. The net debt-to-equity ratio as of the third quarter of the fiscal year was 0.81. The group's total borrowings rose to Rs 1.2 billion in the December quarter from Rs 1.18 billion in March 2023.
In September, the company carried out its first-ever share buyback worth Rs 10,000 crore. During the share buyback period, which ran from September 18th to September 25th, the company repurchased 3.13 billion shares through the tender offer route.
The share buyback was part of L&T's plan to improve return on equity as part of the group's 'Raksha 2026' plan. This was also done in hopes of improving earnings per share along with return on equity.
L&T stock was trading 1.41 per cent higher at Rs 3,721.70 on the BSE, while the benchmark Sensex share price was up 0.77 per cent as of 11:47 am. The stock is up about 5% so far in 2024, with the most recent 12 months up 72%.