Pennar Industries announces buy-back of equity shares

Our Bureau Hyderabad | Updated on November 15, 2019 Published on November 15, 2019

Pennar Industries Ltd (PIL), a Hyderabad-based engineering products and solutions company, has announced a buy-back of equity shares.

The board of directors, at its meeting held on November 12, approved a buyback of the company's fully paid-up equity shares of face value of Rs 5 each from the eligible equity shareholders of the company other than the promoters, promoter group and persons in control of the company. It has an offer price not exceeding Rs 45 per equity share (maximum buyback price), for an aggregate amount not exceeding Rs 40 crore (maximum buyback size).

This is payable in cash through the open market route, under the Buyback Regulations and the Companies Act. The maximum buyback size represents 6.14 per cent and 6.16 per cent of the aggregate of the company's paid-up equity capital and free reserves, based on the audited consolidated and standalone financial statements, respectively, of the company as at March 31, 2019. This is in compliance with the maximum permissible limit of 10 per cent of the total paid-up equity share capital and free reserves, in accordance with Section 68(2) of the Companies Act.

The promoters or their associates will not deal in the shares or other specified securities of the company in the stock exchange or off-market, including inter-se transfer of shares, during the period from the date of board approval till the closing of the buy-back.

The company believes the buy-back will create long-term value for shareholders. It is not likely to have any material impact on the profitability/ earnings of the company. The share buyback will reduce the outstanding number of equity shares and, consequently, improve over a period of time, the earnings per share and key return ratios such as return on net worth and return on assets and will help effectively utilise the available cash.

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Published on November 15, 2019
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