New Delhi, January 24: The country’s most-valued firm Reliance Industries, Tuesday said its Rs 10,440 crore share buyback offer will start from February 1 and closes on January 19, 2013.
In a public announcement, Reliance Industries said that the buyback which is possibly the largest such programme in the history of the Indian capital market, would start on February 1 and closes on January 19 next year (12 months from the date, the board of directors of the company approved the buy back).
RIL would buy back up to 12 crore equity shares worth Rs 10,440 crore from the open market at a maximum price of Rs 870 apiece in its first share buyback since 2005.
“The buyback is expected to increase shareholder value. The buyback of equity share will result in reduction of number of shares accompanied by possible increase in earnings per share and return on capital employed,” RIL said.
“The buyback will also provide a tax efficient mechanism to return money to shareholders and create long term value for continuing shareholders,” RIL added.
Citigroup global Markets and DSP Merrill Lynch has been appointed as the managers to the buyback offer.
Shares of RIL jumped by 2.21 percent in early trade. In The shares were quoted at Rs 781.80, higher by 1.40 percent, on the BSE at 1112 hrs.
Analysts said share buyback could be aimed at helping the stock regain its lost glory, given their sharp plunge of 35 percent last year, against a fall of about 24 percent in the market benchmark Sensex.
Shares of the company had tumbled by 3 percent yesterday after the company reported its first drop in quarterly profit in more than two years due to falling refining margins.
Analysts had also attributed to the fall in share price to size of the buyback, which represented 3.7 percent of the company’s equity capital. RIL had in December, 2004, offered to buyback 10 percent of its equity at Rs 570 per share.
PTI