Mumbai, June 25: Engineering giant Larsen and Toubro (L&T) is considering a special dividend to coincide with the celebration of co-founder Holck Larsen’s birth centenary on July 4.

The board of the Rs 18,000-crore L&T will meet a day before the event to clear a proposal for the payout.

The L&T stock surged to a high of Rs 2,189.40 on the Bombay Stock Exchange today. It closed at Rs 2,166.05, up 2.77 per cent from Friday’s close of Rs 2,107.70.

The last time the company gave a special dividend was in 2004-05 when it paid Rs 10 per share with a face value of Rs 2 each. This was on top of the Rs 17.50 per share it paid as regular dividend.

In 2006-07, the dividend was Rs 13 per share. The highest dividend was in 2005-06 when it paid Rs 22 per share.

“L&T’s dividend-payout ratio is around 40 per cent,” says the company in its FAQs for investors on its website.

“L&T pays a dividend because the company’s investors in India and abroad view this as an important market signal of the management’s confidence in the future,” the note adds.

Henning Holck-Larsen was born on July 4, 1907. He came to India in 1937 just before the outbreak of the Second World War to oversee some construction projects. In the following year, he teamed up with his schoolmate, Soren Kristian Toubro, to establish the eponymous company. Holck-Larsen died in Mumbai in 2003.

In 2006-07, L&T reported an after-tax profit of Rs 1,403 crore for the year ended March 31 on a turnover of Rs 18,041.13 crore.

The company has a big order book and just two weeks ago signed two major contracts.

The first deal was with the ONGC to help the upstream petroleum giant reconstruct the Mumbai High north fields. The Rs 877-crore turnkey project is the largest brownfield project awarded in the offshore oil and gas sector.

It has also secured a Rs 114.43-crore order from the Steel Authority of India Limited for the turnkey construction of a gas insulated sub-station and an associated transmission network for the Bhilai Steel Plant in Chhattisgarh.

The biggest contract it secured last year was for the construction of the third terminal at Delhi airport and other related works at a cost of Rs 5,565 crore.