Adhesive manufacturer Pidilite Industries said it would return up to Rs 500 cr to its shareholder by way of a share buyback.
The company’s board approved a buyback proposal for up to 5 mln shares at a price of Rs 1,000 each, aggregating to Rs 5 bln (500 cr).
The shares are being traded at Rs 929 at present, presenting an upside of Rs 71.
The total shares involved is around 1% of the company’s total equity base.
The amount being returned is less than 25% of the company’s free (cash) reserves as on March 31, 2017.
The buyback will be via a tender process, and will be carried out on a proportionate basis if too many shares are tendered.
The Buyback would be subject to approval of the shareholders by way of a Special Resolution through Postal Ballot and all other applicable statutory approvals, it pointed out.
The buyback period has not been revealed yet.
“The public announcement setting out the process, timelines and other statutory details will be released in due course in accordance with the Buy-back Regulations,” said Pidilite Industries — which makes the Fevicol brand of adhesives.
The company board has set up a Buyback Committee with all powers required to carry out the process.
You can read the full company announcement.