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 board of directors of RIL at its meeting held today unanimously approved the buyback of up to 12 crore fully paid equity shares at Rs 10 each, at a price not exceeding Rs 870 per equity share, up to an aggregate amount not exceeding Rs 10,440 crore, from the open market through the stock exchanges," the company said in a statement.
Market analysts were, however, disappointed by the 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.
The analysts said the share buyback -- coming after a gap of about seven years for RIL shareholders -- could be aimed at helping the stock regain its lost glory, given their sharp plunge of 35 per cent last year, as against a fall of about 24 per cent in the market benchmark Sensex.
"It is reasonable to expect that this will be largest-ever buyback programme in the history of the Indian capital market," said SMC Global Securities Strategist.