The company seems to be doing frequent small buybacks lately. One happened in each of 2022, 2019, and 2018. Please note that 2020 and 2021 were exceptionally bad years, so buyback wasn’t possible.
In the 2022 buyback, the promoter’s shares went down from 18106682 to 17894390 (the percentage holding still went up marginally from 66.12% to 66.34%). With the buyback price of Rs. 245, they must have received about 5.2 cr pre-tax – more than 50% of the total buyback amount.
IMHO, the buyback was not done opportunistically to take advantage of undervalued stock, and the price paid (Rs. 245 per share) was high. It makes me wonder if the objective of the buyback was to return cash to the outgoing shareholders (including promoters) in a tax-friendly manner instead of creating value for the continuing shareholders.
The promoter didn’t participate in the 2019/2018 buybacks, so this doesn’t seem like a recurring pattern.
Would be great to know others’ thoughts on this.
| Subscribe To Our Free Newsletter |
