The Hindu Business Line : Reliance buys back 6.29 lakh shares

RIL shares on Monday closed at Rs 533.30 a share on the BSE, down 1.36 per cent from the previous close. The company spent Rs 33.99 crore, out of the Rs 2,999 crore set aside for the buyback programme, on the first day itself. The corpus represents 10 per cent of the total paid-up equity share capital and free reserves of RIL as on March 31, 2004.

Of the total shares bought on Monday, 3,60,000 shares were bought through the NSE and the remaining 2,69,800 through the BSE.

The company announced the buyback scheme after its board meeting on December 28, 2004, saying the decision was a reflection of the under-valuation of the company's stock price.

The RIL board, on December 27, 2004, approved the buyback of its fully paid-up equity shares of Rs 10 each at a price not exceeding Rs 570 per share. Mr Anil Ambani, RIL's Vice Chairman and Managing Director, had abstained from the decision.

The buyback is expected to lead to an increase in earnings per share because of reduction in the outstanding number of equity shares and an improvement in return on net worth of the company.

Meanwhile, RIL clarified through an advertisement on Monday that Mr Nimesh Kampani, Chairman and Managing Director of J M Morgan Stanley, the manager of the buyback, is one of the trustees of Petroleum Trust, which holds 7.5 per cent of the RIL equity.

Following the RIL-RPL merger, the shares were issued in the name of the trustees of the trust (as a trust cannot hold shares in its own name) against the shareholding of Reliance Industrial Investments & Holdings Ltd (RIIHL), a wholly owned subsidiary of RIL. The sole beneficiary of the trust is RIIHL, the clarification added.

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