Engineering major Greaves Cotton has sought some relaxations on its buyback plan from the Securities and Exchange Board of India (SEBI) and the Ministry of Finance.
The company has got interim observations from SEBI on the draft letter of offer filed on July 4 and is in the process of addressing them, it said in regulatory filings after closing hours on Tuesday.
To discourage the practice of avoiding dividend distribution tax through buyback of shares by listed companies, the Union Budget for 2019-20 has proposed an additional tax of 20 per cent.
"In light of the proposal to introduce a tax on distributed income by listed companies undertaking buyback of shares, vide the Finance (No. 2) Bill 2019 (introduced in Parliament on July 5, 2019), it is hereby submitted that the company has filed: (a) a representation before the Ministry of Finance seeking clarifications on the applicability of the proposal and (b) an application with SEBI informing them about the representation filed before the Ministry of Finance and seeking certain relaxations from them with respect to the buyback," the company added.
Greaves Cotton is a diversified engineering company and a leading manufacturer of cleantech powertrain solutions (CNG, petrol and diesel engines), generator sets, farm equipment, e-mobility, aftermarket spares and services.
On July 11, textile manufacturer KPR became the first company to withdraw its Rs 263.31 crore buyback proposal after Finance Minister Nirmala Sitharaman proposed the additional tax of 20 per cent in case of buyback of shares by listed companies.