Though most of the recent buyback issues’ offer price was at a premium to the prevailing market prices, the shares did not witness any major uptrend during the buyback period, thus clearly showing that the buyback benefited the companies and not investors. Following are the companies whose buyback programmes were open as on end August 2008.
Leading Indian player in technical textiles, refrigerant gases with operating interests in packaging and pharma intermediates SRF approved open market share buyback on 25 April 2008. The offer, at a price not exceeding Rs 160, is slated to remain open up to 24 April 2009. At this maximum price, the company would spend Rs 70 crore, which represents 9.6% of the aggregate of the company’s paid-up equity capital and eligible free reserves end March 2008. Promoters held a 42.11% stake end June 2008.
The maximum buyback price stood at a premium of 15.07% over the closing price of Rs 139.05 on the BSE prevailing on the date of the board meeting. From 2 July 2008 till end August 2008, 21.11 lakh shares were bought back. The SRF stock had hit a 52-week high of Rs 207.40 on 4 January 2008, but had fallen 4.42% to Rs 132.90 end August 2008.
At its board meet held on 25 July 2008, small-cap container handling business firm Gateway Distriparks approved buyback of shares at a price not exceeding Rs 110 per share payable in cash for an aggregate amount not exceeding Rs 64 crore. The offer size represents 10% of the aggregate of the company’s paid-up equity capital and free reserves end March 2008.
The maximum buyback price stood at a premium of 23% over the closing price of Rs 84.70 on 24 July 2008. Since the buyback opening date of 4 August 2008 Gateway Distriparks had bought back 3.24 lakh shares end August 2008. Since the approval of buyback by the company’s board, the stock had moved up 6.63% to Rs 90.80 on 29 August 2008. It was, however, below the buyback price of Rs 110.
Mid-cap manufacturer and seller of refrigerant gases Gujarat Fluorochemicals approved its buyback on 23 March 2008 at a price not exceeding Rs 300 per equity share and total amount not exceeding Rs 61.43 crore, representing approximately 10% of the aggregate of the paid-up equity capital and free reserves eligible end March 2007. Promoters held a 66.45% stake in the company end June 2008.
Since the buyback opened on 21 August 2008, Gujarat Fluorochemicals had bought back 37,643 shares end August 2008. Since the approval of the buyback, the stock had risen 14.6% to Rs 205.25 on 29 August 2008. This was, however, below the buyback price of Rs 300.
Manufacturer and exporter of diamond and gold jewellery products Goldiam International had announced on 25 February 2008 its intention to buy back up to 5.5% of the equity share capital of the company at a price not exceeding Rs 85 from the open market at a cumulative output up to Rs 9.3 crore. Promoters held a 51.24% stake in the company end June 2008.
The buyback of shares was at a maximum price of Rs 85, representing a premium of 52.34% to the closing price on the BSE on the date of the passing of the special resolution through postal ballot, i.e., 21 April 2008. Initiated on 7 May 2008, the company bought back 10.05 lakh shares end August 2008. The stock had hit a 52-week high of Rs 102.80 on 7 January 2008. Since the announcement of the buyback, the scrip had lost 38.9% to Rs 39.65 on 29 August 2008.
On 6 February 2008, mid-cap IT firm Patni Computer Systems’ board approved buyback of shares at a maximum price of Rs 325 and a minimum of 72.92 lakh shares, representing 5.25% of the paid-up equity capital end December 2007 and totaling Rs 237 crore. Indian promoters held 29.2%, stake end June 2008.
The maximum buyback price offered was at a premium of 20% over the closing price on 5 February 2008 — a day prior to the board meeting. Since the buyback opened on 10 July 2008, Patni Computer Systems had bought back 44.71 lakh shares. Since the board’s approval of the buyback, the stock had lost 17.7% to Rs 230.50 on 29 August 2008.
Integrated offshore oilfield services provider Great Offshore announced on 31 March 2008 buyback of equity shares at a price not exceeding Rs 750 per equity share. The aggregate amount of Rs 55.24 crore did not exceed 10% of the total paid-up capital and free reserves, as per the audited balance sheet, end March 2007. Promoters held a 20.3% stake end June 2008.
The maximum price was at a premium of 17% over the closing price of the company’s share end March 2008. The buyback opened on 7 May 2008. Till 22 July 2008, Great Offshore had bought back 8.81 lakh shares. Since the date of the buyback announcement, the stock had fallen 16.63% to Rs 531.60 on 29 August 2008.
Reliance Infrastructure (previously Reliance Energy) said on 5 March 2008 it would buy back shares up to a maximum price of Rs 1600 at a premium of approximately 10% to the closing share price on the date of the board meeting.
An amount of Rs 800 crore ($200 million) was expended in the first phase on the share buyback. This amount represented 10% of the paid-up equity share capital and its free reserves. A further Rs 1200 crore ($300 million) was to be expended in the second phase. This represented an additional 15% of the paid-up equity share capital of the company and its free reserves. Promoters held 36.65% stake end June 2008.
The buyback opened on 17 March 2008. Reliance Infrastructure had bought back 61.6 lakh shares end August 2008. Since the commencement of the buyback program on 17 March 2008, the stock had shed 16.7% to Rs 991.15 on 29 August 2008.
Mid-cap auto ancillary company ANG Auto approved buyback of shares on 12 November 2007 at a price not exceeding Rs 215 per share for an aggregate amount not exceeding Rs 16.12 crore. The buyback size at the maximum level represented 24.30% of the aggregate paid-up equity share capital and free reserves end March 2007.
At the maximum buyback price of Rs 215 per share and for the buyback size not exceeding Rs 16.12 crore, the maximum number of shares that could be bought back was 7.5 lakh shares, representing 6.62% of the outstanding fully paid-up equity shares end March 2007.
The maximum buyback price of Rs 215 per share offered a premium of approximately 29.40% over the closing price prevailing at the date of board meeting held on 12 November 2007 for approving the buyback. As on 27 August 2008, ANG Auto had bought back 46,460 shares. Since the board’s approval of the buyback, the stock had plunged 58.8% to Rs 68.35 on 29 August 2008.
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