In a deal struck with the Birlas last month, L&T had agreed to give up control of its cement business, which is to be demerged. The Birlas, in turn, were to sell their existing stake in L&T to an employee-owned trust.

The L&T management wants to buy the entire Birla stake, presumably because the Birlas will then have no reason to hold on to their two board seats in L&T.

But as the transaction would entail the trust buying more than 15 per cent, it would trigger the 20 per cent open offer clause in Sebi's takeover code.

L&T was earlier looking at various ways of skirting the open offer requirement. These included setting up multiple trusts -- though this would still mean they are organisations acting in concert -- and asking the financial institutions to buy more L&T shares from the Birlas.

Senior L&T executives told Business Standard, "We will be approaching Sebi with a request to consider it as a special case. We are currently busy tying up various ends left loose after the board took the final decision on the cement demerger deal."

L&T will see an outflow of Rs 470 crore to buy out the Birlas from the parent company. L&T plans to fund the acquisition of the shares through seed money contribution from employees, loans to the trusts from the parent L&T and commercial loans. The company is currently in discussion with leading domestic lenders for the financing.

According to senior executives at L&T, the idea of the L&T employees' trust holding around 15 per cent in the company, along with the roughly 40 per cent stake of the financial institutions, is to ensure that the company is not subject to further raids.