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SEBI`s Rejection of Larsen & Toubro`s Buyback Offer |
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INTRODUCTION |
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On the evening of January 18, 2019, SN Subrahmanyan (Subrahmanyan), Managing Director and CEO of Larsen & Toubro Ltd. (L&T) was taken aback when the Securities and Exchange Board of India (SEBI) informed him that L&T’s buyback offer had been rejected. In the rejection letter, SEBI advised L&T not to proceed with the proposed buyback offer as the company’s consolidated debt to equity ratio was higher than the regulatory limit of 2:1. Subrahmanyan said, “Sebi has written, saying they don’t approve the buyback as they see it. We are evaluating various options.”
Experts stated that SEBI’s rejection of the buyback offer raised the question whether companies should consider financial metrics on a consolidated basis or on a standalone basis for calculating the debt-to-equity ratio (D/E ratio) as SEBI had not specified this in the Buyback of Securities Regulations...
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| A NOTE ON SHARE BUYBACK IN INDIA - Next Page>> |
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