The share price of Indian Resort Hotels hit the maximum permissible upper level today in early trades, boosted by its buy-back offer.
The stock later slipped to close at Rs 49.60, up 18.24 per cent, on the Bombay Stock Exchange.
In fact, the scrip gained almost 20 per cent at Rs 41.95 before the buy-back plan was announced after trading hours yesterday, with the market probably having got a clue on the plan.
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Besides witnessing thin volumes, the scrip is not regularly traded on the bourses. The company's board has approval a proposal for buy-back of its equity shares at Rs 70 per share.
The maximum buy-back price is at a 66 per cent premium to yesterday's closing price of Rs 41.95 and at a 39 per cent premium to the current market price of Rs 50.30.
The company's book value per share stands at Rs 104.60 (as on March 31, 2001). The company has a low equity base of Rs 4.20 crore.
Indian Resort proposes to restrict the buy-back offer to the extent of 10 per cent of its paid-up capital and free reserves.
Unlike most other buy-back offers which are conducted through open market purchases, Indian Resort prefers the tender offer route.
Indian Resort Hotels is part of the Taj group of hotels. Aguada Heritage, Fort Aguada Beach Resort and Taj Holiday Village are owned by Indian Resort Hotels.