The Board of leading stock exchange BSE Ltd on Thursday (July 6) approved a share buyback of upto Rs 375 crore shares via a tender route. The buyback price has been set at Rs 816 per share by the Board, which is a premium of 19 percent over today's price. BSE shares were trading almost flat at Rs 683.40 apiece post the share buyback announcement.
This will be the third share repurchase by the country’s only listed equity bourse since its listing in January 2017.
Previously, the bourse had done a Rs 166-crore open market buy back in 2018 at Rs 822 per share (unadjusted price). In 2019, the stock exchange did a tender route buyback worth Rs 460 crore, when it repurchased its shares at Rs 680 apiece.
Under share buyback, the company buys back its own shares from shareholders and it is seen as a tax-efficient way to give cash back to investors. Share buyback reduces the number of shares available in the market and thereby increases the real value of the stock.
Earlier, the bourse had declared a 2:1 bonus issue last year, meaning it issued two bonus shares for every one share held. The stock has been trading ex-bonus since March 2022.
Financials
BSE reported its fourth quarter numbers on May 11, 2023, with a 24 percent jump in net profit to Rs 88.61 crore for the three months ended March. The exchange had recorded a net profit of Rs 71.52 crore in the same quarter of the preceding fiscal, BSE said in a regulatory filing to the National Stock Exchange (NSE).
For financial year 2022-23, the bourse's net profit declined 16 percent to Rs 205.65 crore from Rs 244.93 crore in the same period a year ago. However, its revenue from operations rose 10 percent to Rs 815.53 crore in FY23. In the year-ago period, the same stood at Rs 743.15 crore. The exchange declared a final dividend of Rs 12 per equity share for the financial year 2022-23.
"FY2023 was a challenging but pivotal year for BSE. We made important progress regarding our priorities and have taken significant steps to improve our product profile. As we move forward, there is a significant opportunity to continue to expand and evolve the products and services within our core business," BSE MD and CEO Sundararaman Ramamurthy had said.
The stock settled 0.97 percent higher at Rs 679.30 apiece on Wednesday. The shares have risen nearly 22.15 percent on a year-to-date basis, while its up 11.20 percent in the last one year.
Out of the six analysts that track the bourse, two of them have a 'Buy' rating, while the others have a hold recommendation. Based on the 12-month consensus price target, according to Bloomberg, the shares have a return potential of 7.2 percent.
First Published: Jul 6, 2023 8:43 AM IST
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