Sebi denies permission for L&T buyback offer

Stock market regulator SEBI has rejected Larsen & Toubro's (L&T) planned buyback of 6 crore equity shares by tender offer route from the stock exchange. The stock of L&T was down nearly 2 per cent in early morning trade on Monday.

The proposed buyback was at a price of Rs. 1,475 per share, amounting to approximately Rs. 9,000 crore. The Securities and Exchange Board of India (SEBI) ruled that the buyback offer is not in compliance with Section 68 of Companies Act, 2013 and SEBI' Regulations, 2018 for buy-back of Securities and asked L&T not to proceed with the offer.

SEBI reasoned that if the buyback proceeds, in the event of full acceptance, the ratio of the total of L&T's secured and unsecured debts would be more than double of its paid-up capital and free reserves based on consolidated financial statements of the Company.

Reacting to this development, the stock of L&T was trailing in the early morning session. At 9:27 hours on Monday, the stock was quoting Rs. 1,294.00 per share, down by Rs. 24.25 or 1.84 per cent. While the benchmark index BSE Sensex was at 36,447.70, down by 61.09 points or 0.17 per cent.