Buyback boom! Dwarikesh Sugar shares zoom 6%; know record date and other details

In a regulatory filing, the company said, "The Board of Directors of Dwarikesh Sugar Industries Ltd approved a buyback offer of 30,00,000 fully paid-up equity shares of face value Re 1 each by the company during its meeting held on the 8th March, 2024. This buyback represents 1.59% of the total paid-up equity share capital of the company at a price of ₹105 per equity share. The aggregate consideration of this proposed buyback is up to ₹31.50 crore."

The company has also fixed March 20, 2024, as the record date for the buyback of shares.

Shareholders holding Dwarikesh Sugar shares as of the record date, i.e., March 20, 2024, are eligible to participate in the buyback. "Shareholders will have the opportunity to tender a portion of their shares at the buyback offer price," the company said.

Currently, the promoters hold 42.09% stake in Dwarikesh Sugar, and foreign institutional investors hold 3.97%, according to December 2023 shareholding data.

Under a 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.

Generally, share buybacks in India are carried out in two ways — one through a tender offer and the other through the open market.