The shares of Kaveri Seeds have jumped by 3.33 per cent to trade at ₹565.65 before noon on Wednesday, after the company’s said that its Board of Directors have approved a share buyback.

On Tuesday, the company’s board considered and approved the proposal for buyback of fully paid-up equity shares of face value of ₹2 each, not exceeding 28 lakh, representing 4.44 per cent of the total number of shares in the paid-up equity share capital.

It approved the payment of interim dividend at 150 per cent, that is ₹3 per equity share of face value of ₹2 each, from the profits it earned in 2019-20.

The aggregate amount for the buyback has been pegged at ₹196 crore. The price for the buyback is put at ₹700 from the existing equity shareholders of the company.

The buyback offer size represents 20.01 per cent and 20.14 per cent of the aggregate of the fully paid-up equity capital and free reserves (including securities premium account) as on arch 31, 2019. The promoters and promoter group would participate in the proposed buyback.

Outlook for second quarter

Talking to the investors recently, C Mithun Chand, a whole time Director of the company, said that the company registered revenues of ₹655 crore in the first quarter this financial year, as against ₹581 crore in the same quarter previous year, showing a growth of 12.64 per cent. It clocked a net profit of ₹228 crore in the first quarter as against ₹210 crore. The total cash on books stood at ₹506 crore as on June 30, 2019, as compared to ₹462 crore as on March 31st 2019.

“Our performance this quarter has been very satisfying. Due to the delayed monsoon resulting in delayed sowing of cotton, there is further increase in area. We expect additional volumes from Karnataka, Andhra Pradesh and Tamil Nadu in the second quarter,” he said.

“Higher commodity prices across the board will keep the sentiment positive for the farmer. Introduction of new hybrids in summer bajra should create a new growth opportunity for Kaveri,” he added.

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