Emami approves buyback of shares at 25% premium. 5 key things you should know

Buyback of shares: The board of directors of Emami Ltd has considered and approved proposal for buyback of shares. The multinational conglomerate headquartered in Kolkata informed Indian bourses about Emami buyback plan and declared that Emami buyback price at 450 per share. As Emami share price today is around 360 apiece, the buyback of share has been announced at a premium of around 25 per cent. This Emami buyback would be executed through open market route via stock exchange mechanism.

Informing Indian bourses about buyback of shares, Emami Ltd said, “The Board approved the proposal of Buyback of fully paid-up equity shares having a face value of Re. 1/- (Rupee One only) each of the Company at a price not exceeding 450/- (Rupees Four Hundred Fifty only) per equity share (‘Maximum Buyback Price’) and for an aggregate amount not exceeding 18,600 Lakhs (Rupees Eighteen Thousand Six Hundred Lakhs only) (‘Maximum Buyback Size’).”

Here we list out 5 important details that Emami shareholders should know before tendering shares:

1] Emami buyback price: The multinational conglomerate headquartered in Kolkata has announced buyback of shares not exceeding 450 apiece.

2] Emami buyback date: Record date for Emami buyback of shares is yet to get announced as and when the company board takes any decision in this regard.

3] Emami buyback route: This Emami buyback will be executed through open market vis stock market mechanism.

4] Emami buyback acceptance ratio: As Emami share price today is around 360 apiece, buyback of shares has been announced at a premium of near 25 per cent. Hence, a large number of application is expected from the shareholders. So, Emami buyback acceptance ratio is expected to remain low.

5] Emami buyback size: Emami Ltd informed Indian bourses that buyback size won’t exceed 186 crore.

“The Company shall utilise at least 75% of the amount earmarked as the Maximum Buyback Size for the Buyback i.e. 13,950 Lakhs (Rupees Thirteen Thousand Nine Hundred Fifty Lakhs only) (“Minimum Buyback Size”). Based on the Minimum Buyback Size and Maximum Buyback Price, the Company would purchase indicative minimum number of 3,100,000 Equity Shares,” Emami added.

The Board of Directors of Emami Ltd has also constituted a committee for the purposes of the buyback (the “Buyback Committee”) and has delegated its powers to the buyback committee to do or cause to be done all such acts, deeds, matters and things, in its discretion, deem necessary in connection with the buyback of shares.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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