Currently, Number of equity shares outstanding for ITC stand at 1232crores increasing regularly with the ESOPS. Only other companies which have a higher number of shares outstanding are the likes of VodafoneIdea, Yes bank, IOB,IOCL, Suzlon, ONGC and Tata steel.
Apart from regular ESOPS, ITC has declared bonus issues in 2005,2010 and 2016. If one goes through the 1105 posts above, the discussion on a buyback from ITC has been discarded based on the shareholding tussle between govt of India and BAT.
But, now BAT is looking to monetize on the recent runup in ITC shares and looking to sell their stake upto 4.03% (they have clarified that the stake will not go below 25%. )
A buyback at this moment can work to benefit BAT, GOVT of India (which has directed PSU’s to give back dividends and do buybacks) and retail shareholders.
Reducing the float before the Hotels demerger also benifits all the invested parties further as less shares will have to be issued. How/ Why has ITC management not been thinking in this regards is a surprise to me since the company is sitting on a cash equivalents of atleast 5000crores+.
Any counters to the Buyback suggestion are welcome.
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