Route Mobile announces share buyback: Price, size, key details to know
1 min read . Updated: 29 Jun 2022, 11:33 AM IST
Premium- Shares of Route Mobile plunged over 5% to ₹1,256 apiece on the BSE in Wednesday's early deals
Enterprise communications service provider Route Mobile's board has approved the buyback by the company of its fully paid-up equity shares at a price not exceeding ₹1,700 per equity share (Maximum Buyback Price) and for an aggregate amount not exceeding ₹120 crore (maximum buyback size), from the shareholders of the company, excluding promoters, promoter group and persons who are in control of the company.
The buyback will be done via the open market route through the stock exchanges mechanism. At the maximum share buyback price and for the maximum buyback size, the indicative maximum number of equity shares bought back would be 705,882 ("Maximum Buyback Shares") which is 1.12% of the total number of paid-up equity shares of the company.
Further, the buyback shall not exceed the Maximum Buyback Size, which represents 9.95% and 7.31% of the aggregate of the total paid-up equity share capital and free reserves of the company, Route Mobile informed in an exchange filing.
"The company shall utilize at least 50% of the Maximum Buyback Size i.e., INR 60,00,00,000 (Indian Rupees Sixty Crores only) ("Minimum Buyback Size") towards the Buyback and accordingly, based on the Maximum Buyback Price and Minimum Buyback Size, the Company will purchase an indicative minimum number of 352,942 Equity Shares," it added.
The board has also approved the formation of a buyback committee and delegated its powers to the buyback committee to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient, usual or proper in connection with the buyback.
A share buyback, also known as share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
Additionally, Route Mobile's board approved the appointment of Rathindra Das, group head legal, company secretary and compliance officer for the buyback.
Route Mobile shares, that were trading over 5% lower in Wednesday's early session on the BSE, are down more than 30% in 2022 (YTD) so far.
