L&T is witnessing hectic activity on the bourses as Grasim's much-publicised open offer for additional stake in the company gathers pace.

In fact, the scrip's decline today follows a steady rise over the last few trading sessions. L&T slipped 1.7% to Rs 208.75 today. Around 1.14 lakh shares of the cement, engineering and construction conglomerate changed hands on BSE so far.

Even at the current level, the stock is positioned much higher than the open offer price of Rs 190. The offer opened on 7 May 2003 and will close on 5 June 2003.

According to marketmen, operators have been active in the stock of late, in fact, jacking up prices ahead of the open offer so that acquirer Grasim would be compelled to increase the offer price. From the Rs 185-186 level early April 2003, L&T has now climbed to the Rs 210-plus-level.

Originally scheduled to open on 9 December 2002, the offer was delayed for about five months, after market regulator Sebi began an investigation over a possible violation of the Takeover Code by Grasim. But the offer materialised after Sebi gave a clean chit to Grasim over the management control issue recently. Grasim had acquired 15% stake in L&T in a series of acquisitions since November 2001.

Cement analysts say, though the L&T stock remains fundamentally strong, there is no real bait to lure investors at the current level. For one, the cement industry continues to be faced with problems what with a sustained supply overhang and restrained cement prices. Moreover, with the monsoon due shortly, cement demand is likely to flag as construction activity slows down during the rains.

Poor cement prices impacted the performances of cement companies over the last few months. But on the flip side, analysts say, the cement industry could see much better times in the current year, as no major capacity expansion is expected in the near future.

L&T's April 2003 shipments fell 13.9% from a year ago to 0.87 million tonnes, due largely to the truckers' strike.

L&T has two key division -- engineering and construction (E&C) and cement. The E&C division accounts for 60% of the company's total revenues, while the cement division contributes 27%.