L&T will consider all options to enhance shareholders value, says CEO Subrahmanyan

In a setback for Larsen and Toubro (L&T), market regulator Securities and Exchange Board of India (SEBI) has rejected its Rs 9,000 crore buyback offer. SN Subrahmanyan, MD and CEO of L&T, spoke to CNBC-TV18 about the development.

“The proposal for buyback was filed with Sebi on October 8. One of the requirements was that the debt to equity ratio of the company post buyback should not be greater than 2:1. As per law, this was to be ascertained on the standalone basis. L&T has the debt to equity ratio of 0.17 standalone, hardly Rs 10,500 crore of debt for the kind of operation that we lead. We have a listed subsidiary, L&T Finance where we have 66 percent equity and being a non-banking financial company (NBFC), this company borrowed money and lent money because it cannot collect public deposit as it is not a bank. It is not allowed as per the regulator. So now Sebi has an internal rule on which it has stated that based on that the total debt to equity comes in 2:1. This is an order from Sebi, we have the letter with us. We have informed the stock exchange. We are studying it. In my view, what we have done is what is as per law and what is legitimate and the good mood to return the value to shareholders. So we will have to study it and see how to take it forward,” Subrahmanyan said.

“The immediate focus and objective is to look at the Q3 results, which the board is meeting on January 25 and this may get debated there and then we will see what else to do,” he added.