Larsen & Toubro (L&T) on Thursday announced a Rs 9,000 crore buyback at a price of Rs 1,500 a share.
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SN Subrahmanyam, MD & CEO of the company, spoke to CNBC-TV18 about the buyback and shared outlook.
"The rationale behind the buyback is multi-fold. It reaffirms the confidence we have on the economy and the company," Subrahmanyam said.
Talking about the business, he said, “As an organization we seem to be moving away from a heavy asset model that we are in, the heavy investments that we have made especially in manufacturing area, heavy assets oriented manicuring area and the concession model that we had into some kind of an asset light model.”
“Therefore, the money that we generate from our engineering, procurement and construction (EPC) business is sufficient enough to look at the capex that we need, its sufficient enough to look at any mergers, acquisitions or any other investment that we need to make and with having done all that we still have some surplus money with us and that is what we thought to give back to shareholders as a buyback,” he added.
According to him, buyback was done to improve return on equity (RoE) for shareholders.
On numbers front, he said the company will maintain revenue growth guidance for FY19.