Larsen & Toubro shares under pressure on World Bank ban

Larsen & Toubro (L&T) shares declined nearly 3 per cent in early trade on Monday after the World Bank imposed a 6-month ban on the company, an announcement made after market hours on Friday.

The engineering major's debarment would continue till September 6, making Larsen & Toubro ineligible for being awarded contracts for any World Bank-funded projects, from receiving any loan proceeds made by the Bank or participating in any Bank-financed project . The move comes after the Bank found an executive of the company having indulged in fraud.

"The sanctions imposed by the World Bank for six months ending September 6, 2013, from participating in World Bank funded/executed projects is not expected to have material impact on the company's present or future operations or its profitability or financials," Larsen & Toubro had said on Friday.

The company's stock on Monday fell 2.73 per cent to an intra-day low of Rs 1,455.25 on the Bombay Stock Exchange (BSE). Similar movement was seen on the National Stock Exchange (NSE), where Larsen & Toubro's shares after opening at Rs 1,460, fell 2.75 per cent to an early low of Rs 1,456.25 apiece.

Larsen & Toubro's shares, however, recovered during the day and ended the day marginally higher from their previous close. The scrip closed 0.65 per cent higher at 1,505.80 on the Bombay Stock Exchange. On the National Stock Exchange, the scrip ended the day 0.84 per cent higher at Rs 1,510.20.

With inputs from PTI