Ajanta Pharma Ltd. approved its third share buyback in as many years at its board meeting on Friday.
The board has approved to buyback 22.1 lakh equity shares of face value of Rs 2 each through the tender offer route. The number of shares to be bought back represent 2.59 percent of the total number of equity shares of the company.
Ajanta Pharma will carry out the buyback of shares at Rs 1,425 apiece, which is a premium of 16.2 percent to Thursday's closing price of the stock.
The total buyback consideration would amount to Rs 315 crore.
Based on the pre-buyback shareholding pattern of the company on March 3, 2023, promoters and promoter group held 66.1 percent stake in the company, while FIIs held 10.3 percent stake. Another 13.7 percent stake is held by financial institutions, mutual funds and banks. Public shareholding stands at 9.86 percent.
This is Ajanta Pharma's third buyback of equity shares in as many years. The first buyback happened in November 2020, with the second one in January 2022.
Interestingly, on March 8, another pharmaceuticals major Natco Pharma had also announced a buyback of its equity shares.
The company would buy back fully paid-up equity shares of face value of Rs 2 each at a price not exceeding Rs 700 per share, amounting to a total of Rs 210 crore.
The drug maker’s consolidated net profit dropped nearly 30 percent year-on-year to Rs 134.5 crore during the December quarter compared with Rs 191.8 crore in the year-ago quarter. Revenue grew 16 percent Rs 972 crore mainly due to growth from India business.
In a post-earnings note, equity research firm ICICI Direct advised investors to ‘buy’ the stock with a price target of Rs 1,385 per share.
“We maintain BUY as it remains a compelling play on branded generics (nearly 72 percent exposure) with strong execution track record and financials,” the firm said.
(Edited by : Rukmani Krishna)
First Published: Mar 10, 2023 10:18 AM IST
