Larsen & Toubro announced on Saturday (August 18) that its board of directors will meet on August 23, to consider a proposal for buyback of equity shares of the company.

This will be the first buyback by Larsen & Toubro. The size of buyback and timeline are not known as yet. In any case, the buyback size will not be over 25% of L&T’s paid up capital plus reserves. As at the end of March 2018, the company’s networth was about Rs 49,200 crore, which means the possible buyback size could be Rs 12,300 crore.

Recently, HCL Technologies’ board approved a Rs 4000 crore share buyback proposal and Tata Consultancy Services announced a buyback worth Rs 16,000 crore in June this year. Prior to that, in November 2017, Infosys bought back shares to the tune of Rs 13,000 crore. Wipro too bought back shares, worth Rs 11,000 crore last year.

With investors reacting positively to the announcement and thronging the engineering & construction sector giant’s counter on the bourses, the stock rallied up north this morning.

The L&T stock is up 5.5% at Rs 1308.50, on fairly impressive volumes. On BSE, the counter has clocked a volume of 2.21 lakh shares already, nearly twice the average daily volume of 1.19 lakh shares.

On the National Stock Exchange, the L&T counter has clocked a volume of nearly 3.7 million shares so far in the session.

The stock had touched a 52-week high of Rs 1470 on 1 February 2018. The 52-week low was Rs 1113.05, recorded on 22 August 2017.

Larsen & Toubro reported a net profit of Rs 1215 crore for the quarter ended June 2018, a 36% jump over its net profit of about Rs 892 crore, in the year-ago quarter. Revenue from the infrastructure segment rose 9% to Rs 12,135 crore in the first quarter, while overall revenue from operations increased by 18% to Rs 28,283 crore. L&T’s consolidated order book stood at over Rs 2.7 lakh crore as on 30 June 2018.