ICRA gains 6% as board mulls share buyback proposal

The stock gained 6% to Rs 3,657 on the BSE in intra-day trade after the company said it's board will consider share buyback proposal on Thursday, August 9, 2018.

Shares of ICRA have gained 6% to Rs 3,657 per share on the BSE in intra-day trade after the company- an Indian subsidiary of ratings agency Moody's, said it will consider share buyback proposal on Thursday, August 9, 2018.

Earlier, on July 24, 2018, ICRA had informed the stock exchanges that the board meeting of the company is scheduled to be held on August 9, 2018, to consider and approve the unaudited financial results (standalone and consolidated) of the company for the quarter ended June 30, 2018.

“The board of directors of the Company will also consider a proposal for buy-back of the fully paid-up equity shares of the Company, as well as matters related/incidental thereto, at the said board meeting scheduled to be held on August 9, 2018,” ICRA said in a BSE filing on Friday after market hours.

The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple. The other objective is to improve earnings per share (since the same dividend amount is now distributed among fewer shares).

As of June 30, 2018, the promoters held 50.55% stake in ICRA, the shareholding pattern data shows. Insurance companies held 14.33% holding, followed by foreign portfolio investors (10.72%), mutual funds (10.02%), individual shareholders (6.14%) and HDFC Standard Life (1.53%), data shows.

Thus far in the calendar year 2018, ICRA had underperformed the market by falling 13% as compared to 10% rise in the S&P BSE Sensex till Friday.

At 12:50 PM; the stock was trading 4.5% higher at Rs 3,597 against 0.38% gain in the benchmark index. A combined 3,010 equity shares changed hands on the BSE and NSE so far.