INSUBCONTINENT EXCLUSIVE:
Shares of Larsen Toubro may see a gap-down opening on Monday after market regulator Sebi denied permission for its Rs 9,000 crore share
buyback offer.
In a regulatory filing to stock exchanges, LT said Securities and Exchange Board of India (Sebi) has asked company not to
There would be a negative gapdown on Monday and might impact valuations in short term
Friday settled 2.07 per cent down at Rs 1,318 while BSE Sensex closed flat at 36,387.
LT had proposed to buy back up to 6.1 crore shares
from shareholders at a price of Rs 1,475 per equity share, aggregating Rs 9,000 crore
after buyback (assuming full acceptance) would be more than twice paid-up capital and free reserves of company based on consolidated
financial statements", buyback offer is not in compliance with Companies Act and Sebi norms, market regulator said in a letter to
company.
Sebi has denied buyback proposed citing that post buyback, debt (secured and unsecured) amounting to Rs 1,23,533 crore is twice
free reserves and paid up capital of Rs 56,346 crore and cash of Rs 7,513 crore
This is in non-compliance of Sebi's regulations, according to Target Investing.
Since announcement of buyback in October, shares of
engineering and construction conglomerate rallied nearly 5 per cent till January 18 whereas benchmark Sensex gained 3.5 per cent during same
going for buyback as it is only way to reduce tax incidence
