Grasim Industries, the 15.5 per cent shareholder in Larsen & Toubro, has put the equity value of Larsen & Toubro's non-cement businesses at 1.25 times the value of the cement business.

Given its proposal to the L&T board for an open offer of Rs 130 a share for the cement business, and provided its demerger move is cleared, the composite L&T can be valued at Rs 292.50 a share, including Rs 162.50 a share for L&T's residual businesses.

Grasim made a full disclosure on its alternate cement demerger plan today after the Securities and Exchange Board of India sought more information.

This effective valuation is over 50 per cent more than Grasim's open offer price of Rs 190 per share for L&T, announced three months ago. The offer is awaiting Sebi's clearance.

Grasim would nonetheless go ahead with the Rs 190-a-share open offer for L&T the moment Sebi cleared the offer, sources close to Grasim told Business Standard. "The original open offer will not be withdrawn under any circumstances," they added.

Birla sources said the two valuations are not comparable, as the open offer price was based on Sebi guidelines.

Grasim is seeking a vertical split in L&T's cement business, where shareholders of L&T will get shares of the cement subsidiary in proportion to their current holdings.

Grasim also clarified that the price of Rs 130 per share was based on the limited published information available to it. The valuation could vary, depending on further details that might be available later.

It also reiterated in its statement to the Bombay Stock Exchange that it "does not have any control over L&T", something Sebi was investigating. It also said it was not possible for Grasim to indicate any deadline for the implementation of the demerger proposal.

L&T's shares were up 5.6 per cent at Rs 202.75 on the Bombay Stock Exchange on Wednesday while Grasim's shares were up 0.3 per cent at Rs 346 in a flat market.

Cranking it up

• Equity value of L&T's non-cement businesses pegged at 1.25 times the value of the cement business.
• Move means L&T can be valued at Rs 292.50 a share, including Rs 162.50 per share for residual businesses.
• Grasim made a full disclosure on its alternate cement demerger plan on Wednesday after Sebi sought more information.
• This effective valuation is over 50 per cent more than Grasim's open offer price of Rs 190 per share for L&T, announced only three months back. The offer is currently awaiting Sebi's clearance.