DLF, the country's largest developer, is expected to start implementing its Rs 1,100-crore plan to buy back shares from next week onwards, according to sources.
The DLF board today approved the company's announcement on buyback of shares. The company's stock plunged to its 52-week low at Rs 329 on Monday and marginally recovered to Rs 352.40 on Tuesday, raising expectations of a buyback among investors.
A DLF spokesperson said, "The Sebi rule requires us to approve public announcement of buy back of shares. A board meeting was called well in advance. It was just a coincidence that the stock fell to its 52-week low on Monday.”
In July, the company announced its plan to buy back shares from existing shareholders at a price not exceeding Rs 600 a share.
The company is planning to buy a maximum of 22 million equity shares, or 11 per cent, of the 202 million shares held by the public. Post-buyback, the shareholding of the promoters would increase from 88.16 per cent to 89.32 per cent.
J M Financial and Merrill Lynch are the merchant bankers for the plan. "It is right time for the company to buy shares from shareholders as the stock is trading at low levels. The buyback was announced to bolster investors' confidence,'' said an analyst from a Mumbai-based brokerage, who did not want to be quoted.
