Auto parts maker Bosch has decided to buy back 8.78 lakh shares representing 2.796 per cent of the paid-up capital at ₹23,000 apiece as part of its decision to return surplus funds to shareholders.
In a statement, the company said its board of directors approved the buyback plan on Friday. “The buyback is being undertaken by the company to return surplus funds to equity shareholders and thereby, enhancing the overall returns to shareholders,” the statement said.
Bosch shares fell half a per cent at the end of Friday’s trading to close at ₹22,581.25. Last time Bosch carried out this exercise was in 2009 and it could not mop up the required shares. The promoters’ holding in Bosch at present stands at 71.18 per cent.
The maximum number of equity shares to be bought back is 8.78 lakh equity shares at a price of ₹23,000 aggregating to ₹2,019.76 crore (representing 24.99 per cent of the paid up share capital and free reserves).
The buyback will be done on a proportionate basis through the tender offer route using the stock exchange mechanism according to SEBI guidelines. All shareholders who hold equity shares as on the record date are eligible to participate. The promoters of the company — Robert Bosch GmbH — have expressed their intention to participate in the buyback.
Bosch has 15 manufacturing sites, and seven development and application centres. Bosch Group in India employs over 30,000 associates and generated consolidated revenue of about ₹17,022 crore in 2015. In India, Bosch is the flagship company of the Bosch Group. It earned revenue of over ₹10,415 crore in 2015-16.