Mumbai: Credit rating agency Crisil Ltd on Thursday said it plans to buyback, subject to shareholder approval, up to Rs80 crore of its equity shares at a price not exceeding Rs6,500 per share. Crisil’s shares gained 0.98% to close at Rs5,838.50 on the Bombay Stock Exchange on Thursday.
“The maximum price is at a premium of 14 % over the average closing price of the company’s share in the last three months,” Crisil said in a late evening statement.
The company said it will do this to increase its payout and to “provide a tax efficient mechanism to return money to shareholders.” The buyback of shares will be through “open market purchases.” The buyback amounts to 3.51% of Crisil’s outstanding shares. Its promoter Standard and Poor’s now holds 51.5% stake in the company. If the buyback proposal is fully subscribed, it will increase Standard and Poor’s stake to about 53.2%, going by a back of the envelope calculation.
By end of December 2009, the company had Rs426.5 crore of cash reserve in its books, as per its audited balance sheet. Crisil said the promoters, Standard and Poor’s and its associates, and the directors of the company, will not participate in the proposed buyback.