The shares of air-conditioning major Blue Star Ltd hogged the limelight today after the company announced a buyback at a premium to the market price. The scrip soared by the maximum permissible 20 per cent to Rs 60.95 on the Bombay Stock Exchange (BSE) as around 58,692 shares changed hands.
The stock had been witnessing a surge for the last few trading sessions ahead of the buy-back announcement. From a low of Rs 39.30 on November 7, 2001, the stock has gained 53.30 per cent since then to Rs 60.95 today. The jump in volumes has been enormous. Since November 1, the volume of shares traded on the BSE has jumped by a whopping 9000 per cent from meagre 650 shares to 58,692 shares today.
The surge in Blue Star was followed by the announcement late afternoon today that the company has set Rs 26 crore for buy-back of shares at a maximum price of Rs 75 per share. At the current price of Rs 60.95, the maximum buyback price is at a 23 per cent premium. The buyback will be undertaken through open market purchases, the company has announced.
Blue Star is a leading player in the Rs 1,000 crore air-conditioning industry. The company's core business is central air-conditioning, which mainly involves huge project works. The company accounts for 32 per cent of the central air-conditioning market.
Blue Star till recently derived good revenues from the information technology industry. However, the recent slowdown has had a dwindling effect on the business . The company is now also focusing on room air-conditioning particularly at the retail end.
Blue Star had posted a 40.05 per cent rise in net profit to Rs 5.07 crore for the second quarter ended September 2001, compared to Rs 3.62 crore in the same period of the previous year. Total income for the reporting quarter stood at Rs 122.8 crore against Rs 119.2 crore in the corresponding period of the previous year.
