Emami sets record date for share buyback worth ₹186 Cr for ₹450 per share

With a market valuation of ₹15,424 Cr, Emami Limited is a major mid-cap FMCG company. With brands including BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Mentho Plus Balm, Quick Relief, and Kesh King, Emami Limited is one of the leading skin care and FMCG firms in India offering skin care and healthcare products both in India and overseas. 

On March 24, Emami Ltd's board of directors authorised a proposal to buyback shares for up to ₹186 crore. The company informed the stock exchanges on March 24 that the board had approved the buyback proposal of 41.3 lakh equity shares with a face value of ₹1 each at a maximum price of ₹450 per share. Almost 29.17 percent more than the today's closing price is the buyback price of ₹450.

“This is with reference to our earlier intimations dated March 24, 2023 informing the Stock Exchanges that the Board of Directors approved the proposal of the Company to buyback the fully paid-up equity shares of the face value of ₹1/- (Rupee One Only) (“Equity Shares”) of the Company, each from its shareholders /beneficial owners (other than those who are promoters, members of the promoter group or persons in control), from the open market through stock exchange mechanism for an aggregate amount not exceeding ₹18,600 Lakhs (Rupees Eighteen Thousand Six Hundred Lakhs Only) (“Maximum Buyback Size”), and at a price not exceeding ₹450/- (Rupees Four Hundred Fifty Only) per Equity Share (“Maximum Buyback Price”), payable in cash (the process being referred hereinafter as “Buyback”),” said Emami in a stock exchange filing.

“The Buyback Committee (in accordance with the authority given by Board of Directors in their meeting held on March 24, 2023), in its meeting held today, March 27, 2023 has fixed the record date as April 12, 2023 (“Record Date”). In accordance with Regulation 17(ii) of the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended (“Buyback Regulations”), the Buyback Offer shall open not later than four Working Days from the date of the Record Date and shall close within sixty six Working Days from the date of the opening of the Buyback. Accordingly the Buyback Committee has decided to open the Buyback from April 13, 2023 and close at earlier of (a) sixty six Working Days i.e. July 19, 2023 from the date of the opening of the Buyback; or (b) when the Company completes the Buyback by deploying the amount equivalent to the Maximum Buyback Size; or (c) at such earlier date as may be determined by the Board,” said Emami in a stock exchange filing.

The shares of Emami closed today on the NSE at ₹347.90 apiece level, down by 4.04% from the previous close of ₹362.55. The stock touched a 52-week-high of ₹524.00 on (26-Sep-2022) and a 52-week-low of ₹340.55 on (20-Mar-2023). Commenting on the technical outlook of the stock, A R Ramachandran, Co-founder & Trainer-Tips2trades said "Despite strong fundamentals including strong ROCE, low debt & consistent profit growth, Emami like the other FMCG stocks have underperformed since the past one year due to an extremely bearish sentiment. A promoter buyback is a good opportunity for the stock price to get a boost with strong support at 340. A daily close above 370 could lead to targets of 390-415 in the near term."