 "Sensex, Nifty, stock brokers")
Shares of Godawari Power & Ispat (GPIL) hit an all-time high of Rs 1,086.05, surging 11 per cent on the BSE in Monday’s intra-day trade after the company announced share buyback plan. The stock of iron & steel surpassed its previous high of Rs 1,019.95 touched on June 3.
The board of directors of the company are scheduled to meet on Saturday, June 15, 2024 to consider and approve a proposal for buyback of fully paid up equity shares of the company with face value of Rs 5 each as well as matters related/incidental thereto, GPIL said in an exchange filing.
Earlier, in the financial year 2023-24, GPIL had bought back 5 million equity shares at Rs 500 eac.
In the past one year, the stock price of GPIL has zoomed 187 per cent, as compared to 22.35 per cent rally in the BSE Sensex. In the past six months, it has surged 57 per cent, as against 10 per cent rise in the benchmark index. At 01:06 pm; GPIL was trading 7 per cent higher at Rs 1,045.30, as compared to 0.09 per cent gain in the BSE Sensex.
Buyback or share repurchase is a corporate action in which a company buys back its shares from their shareholders. Generally, companies buyback shares at a price higher than the current market price. There are two types of buyback: tender offer and open market offer. Companies can choose either of these methods to buy back shares from their shareholders.
Also Read
In tender offer the company makes an offer to buy back its shares at a particular price (offer price) at which the shareholders can tender, i.e., sell their shares. In open market the company can buy back its shares by actively buying from sellers from the stock exchanges.
GPIL’s operations span from iron ore extraction from two captive iron ore mines to the production of iron ore pellets and high-value steel products. It is a prominent player in the Indian steel industry, renowned for its integrated steel plants and robust manufacturing capabilities.
The Indian government’s Atmanirbhar Bharat program is aimed at promoting domestic manufacturing, which presents a promising opportunity for steel production and consumption in the country. The production-linked incentive scheme has been introduced to encourage more steel production, which is anticipated to result in increased demand for special steel in sectors such as automobiles, consumer durables, solar equipment and telecommunications. There are attractive prospects in various sectors, including infrastructure, capital goods, automotive, railways, airports, power and others.
Given the positive steel demand outlook, pellet prices should be well supported. India remains one of the bright spots globally for the steel demand. World Steel Association forecasts India's steel demand to increase by 8.2 per cent in calendar 24 and in 25 to 144 million tons and 156 million tons respectively. World Steel Association further predicts that India's steel industry will experience significant expansion propelled by sustained growth across all sectors resilient on steel, particularly driven by robust in infrastructure investment.
GPIL’s robust balance sheet, advantage of captive iron ore mine, production of high-grade pellets, enhanced capacity cost saving, reduction in carbon footprint through the solar power plant, strengthened CAPEX plan and over four decades of industry experience with the promoters, committed in the business leadership, augurs well for the growth of the company, the company said.
