Financial Daily from THE HINDU group of publications
Friday, Dec 24, 2004
Financial Daily from THE HINDU group of publications Friday, Dec 24, 2004 |
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Markets
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Stock Markets RIL gains on share buyback plan Our Bureau
Mumbai , Dec. 23 SHARES of Reliance Industries gained more than two per cent today ahead of the company's crucial board meeting on Monday to decide on buyback of its securities. The stock price of the company gained 2.3 per cent at Rs 506.05 with 32.61 lakh shares traded on the BSE and on the NSE, it closed at Rs 506.30, up 2.7 per cent with volumes of 86.63 lakh shares. Brokers and analyst said the company is likely to announce the buyback price at a level much higher than the current ruling market price. The company is considering three price options for the buyback. RIL is looking at a price of around Rs 540 plus a premium of around 10 per cent. The second option could be an average of last one year's price plus a premium of between 22 and 25 per cent and the third could be last six months' weighted average price plus a premium, a company source said. RIL would ideally look at a buyback price of roughly Rs 600 a share, according to a senior analyst. The analyst, who did not want to be named, said the company's shares had fallen by nearly 12 per cent in the last six months compared to the six per cent gain recorded by the BSE Sensex. According to an industry source, DSP Merrill Lynch has been given the mandate to conduct the buyback. It also had the mandate for the buyback announced in year 2000. Brokers said the share buyback plan fuelled active buying in the stock. This was also seen from Reliance Industries stock at the top of list of most actively traded stocks. On the BSE, the total turnover by Reliance stock was Rs 164.57 crore and on the NSE, it was Rs 437.45 crore. On NSE's derivatives segment, Reliance's December futures contract was the second most actively traded with turnover of Rs 659.26 crore.
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