Shares of Piramal Enterprises ended nearly 5 percent higher on Monday after the company announced that its Rs 1,750 crore share buyback will open on Thursday, August 31.
The Piramal Group company will buyback up to 1.4 crore equity shares through the issue, which will close on September 6, according to the company's Letter of Offer.
The company had set the record date as August 25 for the fixing the eligibility of shareholders for participation in the share buyback offer. The shares would be purchased back on a proportionate basis, through the tender offer route.
Piramal Enterprises had fixed the buyback price at Rs 1,250 apiece, which was a premium of close to 18 percent from its previous day's closing price and around 11 percent from Monday's trading high.
A tender offer buyback is the one in which the company repurchases shares from existing shareholders at a fixed price. Know more about such buybacks in this piece.
The company’s promoters and promoter group will not participate in the buyback offer.
In an interaction with CNBC-TV18, on August 1, Piramal Enterprises Chairman Ajay Piramal said that the buyback is to reward retail shareholders.
Piramal said that there are two aspects to the buyback. One is better utilisation of equity and the other is to reward shareholders that have been with the company. He also spoke about whether the company would need more equity post the buyback.
"After this buyback, our debt equity only goes to 1.3 times. Therefore, even if I take a growth of 20-25 percent for the next 4-5 (years), I don't think we will need any more equity," Piramal said. "So, in that sense, this is better utilisation of the equity. It's also a reward to shareholders who have been with us."
Piramal Enterprises Ltd (PEL) is a leading diversified Non-Banking Financial Company (NBFC) registered with Reserve Bank of India (RBI).
It has presence across retail lending, wholesale lending and fund-based platforms. The company has investments and assets worth $10 billion, with a network of over 300 branches across 25 states and Union Territories.
Shares of Piramal Enterprises ended 4.8 percent higher at Rs 1,109.90.
First Published: Aug 28, 2023 5:22 PM IST
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