Mumbai: Larsen & Toubro (L&T) will take up the rejection of its Rs 9,000 crore share buyback proposal with the Securities and Exchange Board of India (Sebi) and hopes to reach a mid-point on the issue. The market watchdog, on January 18, advised the company against going ahead with its share buyback due to the adverse debt-equity ratio and as it would not be in compliance with the Companies Act and Regulation 4(ii) of the regulator. The infrastructure behemoth has termed Sebi’s decision “a bit harsh”.
Sebi said that the ratio of the aggregate of secured and unsecured debts owned by the company after buyback (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the company, based on its consolidated financial statements. “You are therefore advised not to proceed with this buy back offer,” said the regulator. The company said that it was not aware of such a rule on share buyback that restricted a company, whose post-share buyback debt-to-equity ratio would rise above 2, to undertake such a corporate action.
L&T to take up buyback issue with Sebi
AgenciesUpdated: Wednesday, May 29, 2019, 03:04 AM IST