Business Daily from THE HINDU group of publications
Wednesday, Feb 27, 2008
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Business Daily from THE HINDU group of publications Wednesday, Feb 27, 2008 ePaper | Mobile/PDA Version |
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Power Corporate - Buyback Markets - Stocks
Our Bureau
Mumbai, Feb 26 Reliance Energy Ltd said on Tuesday that the company’s board would consider buyback of shares at a meeting to be held on March 5. A company official said that the company was having cash reserves of over Rs 10,000 crore and the stock was undervalued and, therefore, it was decided to take the ‘buyback’ route. It could invest between Rs 1,000 crore and Rs 2,500 crore, he said. An analyst on condition of anonymity said that the reason for the company to opt for a buyback was ‘illogical and beyond comprehension’. Today the company is opting for a buyback, but in December 2007, the company had opted for Rs 8,000-crore equity capital infusion through a preferential offer. There is incongruity in these two actions, the analyst said. Reliance Energy Ltd, in a December 3 notice to the BSE, had said that company was opting for capital infusion so as to participate in large-scale infrastructure projects, which will be soon open for bidding. “The new equity capital will substantially enhance Reliance Energy’s net worth, and further augment its borrowing capabilities, to enable greater participation in these mega growth opportunities in high growth areas, thereby, generating superior returns for over 1.5 million shareholders” the company had then said in a release to the stock exchanges. The promoters currently hold 34.68 per cent stake in the company, 63.99 per cent is held by the public shareholders, and overseas investors against depository receipts hold the rest of the stake. More Stories on : Power | Buyback | Reliance Energy Ltd | Stocks
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