Goldiam International soars 12%, hits new high on buyback plan

The company said its board will meet on July 21, 2021 to consider a proposal for buyback of equity shares of the Company

Shares of Goldiam International (Goldiam) hit a new high of Rs 564.25, soaring 12 per cent on the BSE in the intra-day trade on Wednesday, after the company said its board will meet on July 21, 2021 to consider share buyback proposal. The stock surpassed its previous high of Rs 534 touched on July 6, 2021.

"A meeting of the board of directors of the company will be held on Wednesday, July 21, 2021, to inter alia, consider a proposal for buyback of equity shares of the company," Goldiam share in an exchange filing.

Goldiam is a reputable integrated manufacturer and supplier of impeccable diamond jewellery to leading retailers and wholesalers in the USA and Europe. In the past one year, the stock of Goldiam has zoomed 415 per cent as compared to a 44 per cent rally in the S&P BSE Sensex.

A share repurchase, or buyback, is a decision by a company to buy back its own shares from the marketplace. A company might buy back its shares to boost the value of the stock and/or to improve the financial statements. Companies tend to repurchase shares when they have cash on hand and the stock market is on an upswing.

As of March 31, 2021, promoters held 66.27 per cent stake in Goldiam while individual shareholders, including investor Ramesh Damani (1.57 per cent), held 28.46 per cent stake in the company, the shareholding pattern data shows.

The company’s consolidated cash and cash equivalents stood at Rs 310 crore, which is around 51.4 per cent of the total assets at the end of March 31, 2021. Over the last five years, the company has delivered an average dividend payout of 62.3 per cent of standalone profit after tax (PAT) and two buy‐back of shares to the tune of Rs 30 crore.

Goldiam, while announcing March quarter results, had said the company has an order book size of Rs 200 crore of which lab‐grown diamonds constitute 10 per cent. This order book, it had said, is expected to be executed over the next 4‐6 months, e‐commerce sales are 20 per cent of total sales, which do not constitute part of the order book.