'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 of the company, the buyback offer is not in compliance,” Sebi said in a letter dated January 18, 2019.

L&T had proposed a buyback of up to 61 million equity shares from its equity shareholders as on the record date, being October 15, 2018, on a proportionate basis by way of the tender offer route through the stock exchange mechanism at a price of Rs 1,475 per equity share.

In August last year, the L&T board approved its first buyback in 80 years of the company’s history, for up to 4.29 per cent of its paid-up equity capital, aggregating to a value of about Rs 9,000 crore, subject to approvals.

Since August 20, 2018, L&T had outperformed the market by gaining 6 per cent, as compared to a 4 per cent decline in the S&P BSE Sensex till Friday.

L&T will report its earnings for the December quarter on Friday, January 25, 2019 and the Street may look for further clarity in the management’s guidance post results. The foreign brokerage firm expects, L&T board could approve one-time large dividend.

At 09:36 am, L&T erased most of its early morning losses and was trading 0.37 per cent lower at Rs 1,313 on the BSE. In comparison, the benchmark index was up 0.58 per cent or 212 points at 36,598 levels. A combined 3.72 million equity shares changed hands on the counter on the NSE and BSE so far.