The board of directors of Akzo Nobel India Ltd will on May 21 consider a shares buyback proposal which has been on the works for months.

The news lifted the stock price by about 3 per cent on the BSE though the overall equity market was down.

The company had announced in February that its board would consider a buyback proposal.

Later, it said that it would consider the proposal after the Scheme of Amalgamation of Akzo Nobel India with three subsidiaries — Akzo Nobel Car Refinishes India Pvt Ltd, Akzo Nobel Coatings India Pvt Ltd and Akzo Nobel Chemicals (India) Ltd.

Subsequently, Akzo Nobel said that the High Court at Calcutta vide its order dated April 24 has approved the Scheme of Amalgamation of the three companies with itself.

Akzo Nobel India (previously known as ICI India) manufactures and markets paints, speciality chemicals and starch and has an employee strength of about 900.

In the quarter ended September 30, 2011, the company registered net sales of Rs 303.89 crore and a net profit of Rs 36.87 crore. Reserves stood at Rs 1,185.88 crore.

The company’s equity base was Rs 36.83 crore of which 43.60 per cent was with the public as on March 31, 2012.

This was held by a wide spectrum of investors — 1.18 per cent FIIs, 17.3 per cent Domestic Institutional Investors and others held 21.88 per cent, apart from the promoters who hold 59.64 per cent.

Interestingly, its major rival in the paints business, Asian Paints, also holds shares in the company.

Shares of Akzo were trading at Rs 868.40 on the BSE, a gain of Rs 25.90 or 3.07 per cent with a trading volume of 7,160 shares.

On the volume front, about 2,500 shares were traded per day.

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