IiAS says need more clarity from Sebi on buyback guidelines
The Institutional Investor Advisory Services (IiAS), on Monday said the market regulator has to clarify on buyback guidelines.
After Securities and Exchange Board of India (Sebi) denied permission for Larsen & Toubro's (L&T) Rs 9,000 crore share buyback offer, the Institutional Investor Advisory Services (IiAS), on Monday said the market regulator has to clarify on buyback guidelines.
In an interview to CNBC-TV18, Amit Tandon, managing director, said arguments put forward by Sebi and L&T have merit, "I think market regulator's reaction of follows the developments that have taken place with IL&FS primarily."
According to Tandon, guidelines seems to be a bit ambiguous with regard to use of standalone/consolidated numbers.
Last week, in a regulatory filing to stock exchanges, L&T said the Sebi has asked it not to proceed with the buyback.
"Since the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the company based on consolidated financial statements", the buyback offer is not in compliance with the Companies Act and Sebi norms, the regulator said in a letter to the company.
L&T had proposed to buy back up to 6.1 crore shares from shareholders at a price of Rs 1,475 per equity share, aggregating to Rs 9,000 crore. The offer was open to those holding equity shares as on October 15.
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