Reliance Industries today said that its Rs 10,440 crore shares buyback offer will start from February 1 and close on January 19, 2013.
In a public announcement, Reliance Industries said that the buyback which is possibly the largest such programme in the history of the Indian capital market, would start on February 1 and close on January 19 next year (12 months from the date, the board of directors of the company approved the buyback).
RIL would buy back up to 12 crore equity shares worth Rs 10,440 crore from the open market at a maximum price of Rs 870 apiece in its first share buyback since 2005.
“The buyback is expected to increase shareholders value.
The buyback of equity share will result in reduction of number of shares accompanied by possible increase in earnings per share and return on capital employed,” RIL said.
“The buyback will also provide a tax efficient mechanism to return money to shareholders and create long-term value for continuing shareholders,” the company added.
Citigroup global Markets and DSP Merrill Lynch has been appointed as the managers to the buyback offer.
Shares of RIL jumped 2.21 per cent in early trade. Later, the scrip was quoting at Rs 781.80, higher by 1.40 per cent, on the BSE.
Analysts said the shares buyback could be aimed at helping the stock regain its lost glory, given its sharp plunge of 35 per cent last year, against a fall of about 24 per cent in the market benchmark Sensex.
The scrip had tumbled by 3 per cent yesterday after the company reported its first drop in quarterly profit in more than two years due to falling refining margins.
Analysts had also attributed to the fall in share price to size of the buyback, which represented 3.7 per cent of the company’s equity capital. RIL, had in December 2004, offered to buyback 10 per cent of its equity at Rs 570 per share.