Reliance Infrastructure, the engineering, infrastructure and construction company from the Anil Ambani group has again started share buy-backs on a large scale.
The company announced that it had bought back 1 lakh shares of the company today from the open market. At around Rs 695 per share, the company has spent Rs 7 crore in today’s buy-back alone.
It said it has an ongoing buy-back program worth Rs 1,000 crore and has already bought back 8 lakh shares.
Companies typically buy back shares from the market when they feel that they are under-valued. Buying back shares reduces the total shares in the market, increasing the per-share markers such as earnings per share, sales per share etc..
Better per-share markers help lift the price of the stock and while the smaller stock-based helps the company offer bigger dividends.
Reliance Infrastructure is developing two metro rail projects in Mumbai and operating Airport Metro Express in Delhi. It has been awarded eleven road projects with total length of close to 1,000 km and operates five airports in Maharashtra.