HUL okays share buyback not exceeding Rs 280/share

HUL board has given its nod to buy back shares worth up to Rs 630 crore, which is within 25% of the total paid-up capital. The buyback amounting to 2.25 crore shares, which would translate into about 1% of the total equity, will be done at a price not exceeding Rs 280 per share. The motive, analysts say, is to provide a sentimental boost as it won't have any material impact on the stock.

The maximum price that has been fixed is at about 20% premium to the average closing price of the stock for the last three months.

The company has equity and reserves of about Rs 2583 crore. It also has cash and bank balance of Rs 1892 crore.

Analysts feel that the buyback has been done to provide a sentimental boost to the stock in the market to arrest the decline in stock price that the company has been witnessing in the past six months and do not expect a materal impact as far as the buyback is concerned.

The last time HUL did a buyback was in 2007 when it was carried out at an average share price of Rs 207 per share and the company had bought about 3 crore shares.

The HUL shares closed at Rs 252.50, up Rs 0.35, or 0.14%. Its market capitalisation stands at Rs 55,087.59 crore.

News source: http://www.moneycontrol.com/news/business/hul-okays-share-buyback-not-exceeding-rs-280share_463699.html

Regards,
Share to win

http://sharetowin.blogspot.com