The board of directors of Exide Industries Ltd today approved the buy-back of shares up to 10 per cent of the total paid-up capital and free reserves of the company, at a price not exceeding Rs 70 per share through the open market route.
The share is currently quoted at around Rs 57 on the bourses. "The company took the decision in accordance with the recent ordinance amending the Companies Act, which permits firms to buy back shares up to 10 per cent of its capital and reserves without shareholders' approval," chairman S B Ganguly said.
The pricing of the buyback is attractive and is "virtually a bonus in the present circumstances given the prevailing market price," Ganguly added.
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The market, however, did not react sharply as the share drifted at the prevailing price.
Ganguly said several minority shareholders had pointed out in the last annual general meeting that they were getting poor returns despite good performance owing to depressed share prices of the Rs 900 crore company.
"Exide is a market leader in the wet storage batteries industry and this (buy-back) move will enhance shareholders' value," Ganguly explained.