Smartlink Network Systems surges 15% as board mulls share buyback proposal

The stock surged 15% to Rs 103 on the BSE after the IT networking equipment firm said that its board will meet on Saturday, April 7, 2018 to consider the share buyback proposal.

Shares of Smartlink Network Systems have surged 15% to Rs 103 per share on the BSE in early morning trade on Thursday after the IT networking equipment firm said that its board will meet on Saturday, April 7, 2018 to consider the share buyback proposal.

The trading volumes on the counter jumped multiple folds with a combined 254,074 equity shares changed hands on the NSE and BSE till 09:27 am.

“A meeting of the board of directors of the Company will be held on April 07, 2018 to consider the proposal to buy-back the fully paid-up equity shares of face value Rs 2 of the Company,” Smartlink Network Systems said in a regulatory filing.

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).

In past one year, Smartlink Network Systems had underperformed the market by falling 10% as compared to 10% rise in the S&P BSE Sensex till Wednesday.