Hindustan Unilever Ltd (HUL), in a filing to the stock exchanges on Thursday, said its board of directors would meet on June 11 to consider a share buyback.
The stock was up 4.02 per cent on Thursday, to close at Rs 247.20 on the Bombay Stock Exchange(BSE). It hit an intra-day high of Rs 250.30.
According to analysts, the move to do a buyback at this time is aimed at propping up market sentiments. The last time HUL did a buyback was at the end of July 2007, at a price of Rs 230 per share. This was at a premium of 17 per cent over the stock price at that time, which was Rs 196. HUL spent over Rs 600 crore doing the buyback then. This time, the outgo is likely to be the the same, say analysts. “While we are enthused with the buyback, fundamentals of the stock remain weak,” said Anand Shah, senior FMCG analyst, Angel Securities.
