Indiabulls Ventures‘ board has approved a buyback of 6.67 crore shares at Rs 150 per share at their meeting held on October 11.
The buyback, via the ‘tender offer’ route, will cost the company Rs 1,000 crore, the company said in a filing with BSE.
The buyback is subject to shareholder approval by way of a special resolution, through a postal ballot, it added. The company is yet to decide on a record date for the same.
The buyback size is more than 10 percent of the company’s paid-up equity capital. Thus and free reserves shall be subject to the approval of shareholders by way of a special resolution, it added.
The Board has constituted a Buyback Committee and delegated powers to it to oversee and implement the process.
Buybacks are usually initiated as a means check fall in stock prices by making them scarce. After the announcement, shars of Indiabulls Ventures rallied 8 percent intraday.
The stock had fallen more than 65 percent in the past three months amid reports of corporate governance issue and concerns related to the Indiabulls Group. It was quoting at Rs 103.70, up by Rs 4.10 or 4.12 percent on the BSE at 10.55 hours IST.As of September, promoters held 35.53 percent stake in the company, while foreign shareholding stood at 39.30 percent.