Larsen & Toubro (L&T) on Thursday announced that its board would meet on July 25 to consider a share buyback and special dividend.

The engineering and infrastructure conglomerate said in a regulatory filing that while its board will meet on July 25 to approve results for the quarter ended June 30, it will also consider a proposal for “buyback of equity shares in accordance with the provisions of the Companies Act, 2013 and Sebi (buyback of securities) Regulations 2018 and special dividend on equity shares for the financial year 2023-24”.

L&T added that if approved, the record date for the purpose of determining the entitlement of the equity shareholders for the special dividend will be August 2.

While the announcement was made after market hours, the L&T stock closed flat at Rs 2,489.60 on the BSE. The stock has gained nearly 11 per cent over the past six months.

In a buyback, a company acquires its extinguished shares from the market or from shareholders. It improves earnings per share and supports the share in poor market conditions while returning surplus cash to shareholders.

This is the second time that L&T is planning a buyback. In 2019, the company had proposed to buy back up to 6.1 crore shares at a price of Rs 1,475 apiece aggregating to Rs 9,000 crore. But Sebi had denied permission.

“Since the ratio of the aggregate of secured and unsecured debts owed by the company after the buyback (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the company based on consolidated financial statements, the buyback offer is not in compliance with the Companies Act and Sebi norms,” Sebi had said in a letter to the company.