Piramal Enterprises to KRBL: These stocks in focus as share buybacks open today
Piramal Enterprises aims to buyback 1.45 crore shares at a price of Rs 1,250 per piece through a tender offer. The total share buyback amounts to Rs 1,750 crore. Piramal Enterprises offers a premium of nearly 18 per cent for its share buyback. On the other hand, Indianmart offers a premium of nearly 31 per cent for its share buyback at Rs 500 per piece.
With the earnings season coming to an end, many companies have announced share buyback programs. Four companies have opened their strategic buyback today. The share buyback period for these four companies will be between August 31 and September 6.
Piramal Enterprises, Indiamart Intermesh Ltd, FDC and KRBL open their share buybacks today.
A share buyback is a financial strategy employed by companies to purchase their own outstanding shares from the open market. This process effectively reduces the number of shares available to the public. Companies often undertake share buybacks for various reasons, including enhancing shareholder value, signalling confidence in their financial health and optimising their capital structure.
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Share buybacks can lead to increased earnings per share (EPS), higher stock prices, and improved financial ratios. Additionally, buybacks can signal management's confidence in the company's future prospects, potentially boosting investor confidence and overall market sentiment. More importantly, share buybacks can allow investors to exit their positions with a significant premium on the shares they hold.
That’s why it's important for shareholders to keep a watch on buybacks announced by the companies.
Piramal Enterprises: The buyback for Piramal Enterprises shares will be open from August 31 to September 6. The company aims to repurchase 1.45 crore shares at a price of Rs 1,250 per piece through a tender offer. The total share buyback amounts to Rs 1,750 crore. Piramal Enterprises offers a premium of nearly 18 per cent for its share buyback compared to its current market price.
Piramal Enterprises shares were trading at Rs 1061.45 apiece, up 0.67 per cent, on BSE.
Indiamart: Share buyback of B2B online marketplace Indiamart also opened on Thursday, August 31. Through a tender offer, the company seeks to regain 12.5 lakh shares, priced at Rs 4,000 per piece. This strategic move reiterates Indiamart's commitment to enhancing investor value, as the buyback amounts to Rs 500 crore, reflecting its strong market presence. The share buyback price indicates a premium of nearly 31 per cent per share from the current price level of the stock.
Shares of Indiamart were trading 1.55 per cent higher at Rs 3053.90 apiece on BSE.
FDC: FDC Ltd through its share buyback intends to repurchase 31 lakh shares at a price of Rs 500 per share through a tender offer. This calculated step accentuates FDC's commitment to optimising its capital structure and reinforcing shareholder confidence. Meanwhile, FDC shares were trading marginally lower at Rs 384.65 apiece, down 0.54 per cent, on BSE. The company's buyback floor price indicates nearly 30 per cent premium to the current market price.
KRBL: Rice exporter KRBL Ltd share buyback also opened on Thursday and involves the repurchase of 65 Lakh shares at a price of Rs 500 per piece through a tender offer. This strategic move underscores KRBL's aspiration to augment shareholder value. The buyback price indicates a premium of more than 23 per cent from the current market price. Shares of KRBL Ltd were trading 1.07 per cent higher at Rs 405.30 apiece on BSE.