After Securities and Exchange Board of India (Sebi) denied permission for Larsen & Toubro's (L&T) Rs 9,000 crore share buyback offer, the Institutional Investor Advisory Services (IiAS), on Monday said the market regulator has to clarify on buyback guidelines.

In an interview to CNBC-TV18, Amit Tandon, managing director, said arguments put forward by Sebi and L&T have merit, "I think market regulator's reaction of follows the developments that have taken place with IL&FS primarily."

According to Tandon, guidelines seems to be a bit ambiguous with regard to use of standalone/consolidated numbers.

Last week, in a regulatory filing to stock exchanges, L&T said the Sebi has asked it not to proceed with the buyback.

"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", the buyback offer is not in compliance with the Companies Act and Sebi norms, the regulator said in a letter to the company.

L&T had proposed to buy back up to 6.1 crore shares from shareholders at a price of Rs 1,475 per equity share, aggregating to Rs 9,000 crore. The offer was open to those holding equity shares as on October 15.