Financial Daily from THE HINDU group of publications
Saturday, Jul 23, 2005
Financial Daily from THE HINDU group of publications Saturday, Jul 23, 2005 |
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Diversified Corporate - Buyback Reliance Ind board to take up early closure of buyback Our Bureau
Mumbai , July 22 RELIANCE Industries Ltd is going to consider an early closure of its buyback offer at its board meeting next Wednesday, the company told BSE today. Such a decision would cut short the buyback offer period, fully five months before its scheduled closure. The buyback decision, which had fetched singular opposition from Mr Anil Ambani when RIL's board of directors approved it on December 27 last year, has met with dismal response. The company has been able to acquire only 2.86 million shares worth Rs 149.6 crore to date, a fraction of what it hoped to obtain. The buyback programme had sought to obtain up to 10 per cent of RIL's equity at a price not exceeding Rs 570 per share and an amount not exceeding Rs 2,999 crore. The first day of the buyback offer, January 10 this year, saw 6.29 lakh shares being tendered and bought for Rs 34 crore. But the response gradually petered off, what with the share price seen to be on the ascendant. The offer was to close on January 10 next year. The share price has risen over 26 per cent since January, considering its BSE closing price of Rs 689.70 today. The buyback was to be made out of the free reserves and/or the securities premium account of the company by open market purchases through stock exchange(s), as per provisions contained in the SEBI (Buy Back of Securities) Regulations, 1998. At that time Reliance had said that its shares were undervalued and that this offer would improve the EPS of the company. This was also to represent the largest ever equity share buyback in India, the company had said. The decision to revoke the buyback offer follows the settlement arrived at between the Ambani brothers last month.
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