The mid cap chemicals company- Atul Ltd. in its board meeting held today (March 25, 2022) approved Buy-back of fully paid up Equity Shares by the Company having face value of Rs. 10/- each from open market through stock exchanges under the Buy-back Regulations and the Act, for an amount not exceeding Rs. 70 crores. Further the maximum buyback price has been given out as Rs. 11000 per share.
In an exchange filing, the company said, ubject to such other approvals, permissions and sanctions as may be necessary, approved the Buy-back of fully paid up Equity Shares by the Company having face value of Rs. 10/- each from open market through stock exchanges under the Buy-backRegulations and the Act, for an amount not exceeding ~ 70,00,00,000/- ("Maximum Buy-back Size") excluding transaction costs viz. brokerage, advisor's fees, intermediaries fees,public announcement publication fees, filing fees, turnover charges, applicable taxes such as tax on distributed income on Buy-back, securities transaction tax, goods and services tax, income tax, stamp duty, other incidental and related expenses, etc. ("Transaction Costs") at a price not exceeding Rs.. 11,000/-per Equity Share ("Maximum Buy-back Price") payable in cash which represents 2.16% and 2.10% of the total paid-up equity share capital and free reserves".
"At the Maximum Buy-back Size and the Maximum Buy-back Price, the indicative maximum number ofEquity Shares to be bought back under the Buy-back would be 63,636 Equity Shares which represents 0.22% of the total number of Equity Shares of the Company", added the company.
Share Buyback or share repurchase is when a company buys its own outstanding shares to reduce the number of shares available on the open market. Companies buy back shares for a number of reasons, such as to increase the value of remaining shares available by reducing the supply or to prevent other shareholders from taking a controlling stake. As the number of outstanding shares get reduced upon a share buyback, the share value as well as earnings per share increase.
At the current price of Rs. 10,117.8, the company's buyback offers a premium of 8.7 percent.
Atul is an improvement driven, integrated chemical company serving about 4,000 customers belonging to 30 industries across the world. The Company has established subsidiary companies in the USA, the UK, China, Brazil and the UAE to serve its customers and thus enhance breadth and depth of its business.