Sebi set to clear Grasim open offer for L&T stake

The Securities and Exchange Board of India (Sebi) is understood to have given a clean chit to Aditya Birla group major Grasim Industries on ...

The Securities and Exchange Board of India (Sebi) is understood to have given a clean chit to Aditya Birla group major Grasim Industries on the issue of ‘controlling’ Larsen & Toubro (L&T). With this, the market regulator is likely to give a go-ahead to Grasim’s open offer to pick up an additional 20 per cent stake in the target company.

Sebi’s investigation department is expected to submit its report of ‘Investigation into Grasim’s control of L&T’ to its chairman early next week.

The Sebi chairman had indicated in the first week of February that the probe into the Grasim-L&T issue will be completed within two weeks.

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And it seems that Sebi’s investigation department may meet this deadline. After the investigation department gives a clean chit to Grasim, Sebi will allow the company to go ahead with its open offer at the same price.

However, Sebi cannot ask Grasim to come out with an open offer at a higher price, as reported in a section of media. This was because the main point of its investigation was the issue of control and not the higher or lower offer price, explained sources associated with the investigation.

Sebi’s decision to probe the Grasim control issue followed an order of the Securities Appellate Tribunal in the case of Gujarat Ambuja-ACC in October 2002, where SAT had asked Sebi to re-investigate the whole issue of control of ACC by Gujarat Ambuja when the latter acquired just below 15 per cent stake from the Tatas in 1998-99.