Textile Stock Declares Share Buyback of Rs 199.50 Cr For Rs 3,800: Bet For 15% Premium?

As of Tuesday's closing session, Garware Technical Fibres Ltd., a mid-cap company in the textile industry, has a market valuation of Rs 6,806.06 Cr. Following the announcement of a buyback agreement involving 5,25,000 fully paid-up equity shares with a face value of Rs 10 at a price of Rs 3800, the stock closed the day 0.30% higher at Rs 3301 per share. The buyback size will be payable in cash for an aggregate amount not exceeding Rs 199.50 Cr. The buyback price of Rs 3800 represents a premium of 15.11% at the current market price of Rs 3301 on BSE.

The Board of Directors "approves the buyback by the Company of its fully paid-up equity shares having a face value of INR 10/- (Indian Rupees Ten Only) each ("Equity Shares"), at a price of INR 3,800/- (Indian Rupees Three Thousand Eight Hundred only) per Equity Share ("Indicative Buyback Price") payable incash for an aggregate amount not exceeding INR199,50,00,000 /- (Indian Rupees One Hundred Ninety Nine Crores Fifty Lakhs only) ("Buyback Size"), excluding any expenses incurred or to be incurred for the buyback viz. brokerage, costs, fees, turnover charges, taxes such as buyback tax, securities transaction tax and goods and services tax (if any), stamp duty, advisors fees, printing and dispatch expenses and other incidental and related expenses and charges ("Transaction Costs"), which represents 19.63% and 19.91% of the aggregate of theCompany's fully paid-up capital and free reserves as per the latest standalone and consolidated audited financials of the Company for the year ended as on March 31, 2023 respectively from all the shareholders/ beneficial owners of the Equity Shares of the Company, including promoters and members of the promoter group, as on a record date Tuesday, March 12, 2024 ("Record Date"), through the "tender offer" route, on a proportionate basis as prescribed under the SEBI Buyback Regulations (hereinafter referred to as the "Buyback")," said Garware Technical Fibres in a regulatory filing on March 11,2024.

"All the shareholders of the Company, as on the RecordDate, including the promoters and members of promoter group, shall be eligible to participate in the Buyback, except any shareholders who may be specifically prohibited under the applicable laws by Appropriate Authorities. The proposed Buyback be implemented from the existing shareholders as on Record Date in a manner the Board may consider appropriate, from out of its free reserves and/or securities premium account and/or such other sources of funds or by such mechanisms as may be permitted by applicable laws, and on such terms and conditions as the Board or a duly constituted committee thereof authorised by the Board in that behalf may decide from time to time, and in the absolute discretion of the Board, as it may deem fit," the company further added.

Garware Technical Fibres Share Price Target

"Garware Technical Fibres stock price is sideways to bearish with strong resistance at 3400 on the Daily charts. A daily close above this resistance could lead to a target of 3680 in the near term. Support will be at 3190," said AR Ramachandran from Tips2trades.

Disclaimer

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