DLF to buy back shares worth up to Rs 1,100 cr
The realty giant said it will buy back up to 2.2 crore shares from the market at Rs 600 each, as the firm's intrinsic value and future growth potential is not reflected in its current share price.Updated: Jul 10, 2008 15:06 IST
Realty giant DLF on Thursday said it would buy back up to 2.2 crore shares from the market at a maximum price of Rs 600 each, as the firm's intrinsic value and future growth potential is not reflected in its current share price, which has dipped below the IPO price of Rs 525.
At a meeting held earlier on Thursday, the company's board has approved the buy back plan for purchasing shares worth up to Rs 1,100 crore that would come through internal resources.
About a year ago, the company had sold its shares to the public for Rs 525 each in its IPO and the shares had soared to a life-time high of Rs 1,225 on January 15 this year.
However, the stock has been on a sharp downslide since then and hit a life-time low of Rs 350.30 on July 2 -- the day when the company first announced its intention for buying back the shares. Following the announcement, shares rose sharply by about 15 per cent that day.
The company said that the shares would be repurchased from the BSE and NSE through open market deals and the buyback scheme would be valid for the next 12 months.
If DLF buys back entire 2.2 crore shares as proposed, the holding of its promoters, KP Singh and family, would rise to about 89.5 per cent, from 88.16 per cent currently.
The promoter holding in the company is currently worth about Rs 70,000 crore (over 15 billion dollars).
"The company's aim has always been to maximise shareholders value and we see the share buyback decision as a highly attractive opportunity for out shareholders," DLF Vice Chairman Rajiv Singh said in a statement.
"While we respect the market, we believe that our current price do not reflect the intrinsic strength and future growth potential of DLF," Singh added.
Shares of the company were trading on Thursday at Rs 458.40, up 1.8 per cent from its previous close on the BSE.