Crompton Greaves said its proposed buyback of equity shares of up to Rs 265.7 crore would not begin on July 15.
The company said SEBI had communicated its observations and suggested amendments to the buyback proposal on Friday and that it was in the process of incorporating them.
The Crompton Greaves Board approved the buyback of up to a maximum of Rs 125 per share or up to Rs 265.7 crore.
At the top end this was a premium of about 43.2 per cent of the scrip’s closing price of Rs 87.30 on BSE on June 28, the day of the announcement was made.
On June 25, 2013, SEBI came out with the revised buyback norms, which have not been notified so far.
Under the revised norms, companies need to create an escrow account towards security for performance with an amount equivalent to at least 25 per cent of the amount earmarked for the buyback.
Further, the minimum buyback has been increased to 50 per cent of the amount the buy-back amount, as against the existing 25 per cent, failing which the amount in the escrow account would be forfeited subject to a maximum of 2.5 per cent of the earmarked amount.
The buyback period has also been reduced to six months from 12 months.
In addition, companies going in for buyback will not be permitted to raise further capital for one year from the closure of the buyback, except to discharge of subsisting obligations. Further, another buy-back offer cannot be made within one year from the date of closure of the preceding offer.
Promoters are also barred from executing on-market or off-market transactions during the buy-back period.
Arun Kejriwal, Founder, KRIS Research, said, “The Crompton Greaves management may have realised that even though the new amendment is yet to be notified they would apply to the proposed buyback. Not willing to commit 50 per cent the management could have decided not to go ahead as per schedule.”