Textile stock announces share buyback, fixes record date; shares jump
1 min read 21 Sep 2022, 01:55 PM ISTSP Apparels shares jumped over 6% on the BSE in afternoon deals after the buyback announcement
PremiumSP Apparels Ltd on Wednesday announced that its board has approved share buyback of 6 lakh shares at ₹585 apiece. The textile stock jumped over 6% to ₹441 apiece on the BSE in afternoon deals after the buyback announcement. The Buyback is proposed to be undertaken from the equity shareholders of the company as on the record date i.e. October 07, 2022 on a proportionate basis, through the Tender Offer route.
“We inform you that the Board of Directors of SP Apparels Limited at their meeting held today have approved the proposal to buy back up to 6,00,000 fully paid up equity shares having a face value of ₹10 (Rupees Ten Only) each representing up to 2.34% of the total number of equity shares in the paid-up equity share capital of the company, at a price of ₹585/- per equity share (Buyback Price) payable in cash for a maximum amount not exceeding ₹35,10,00,000/- (Buyback Size), representing 5.68% and 5.62% of the aggregate of the fully paid-up equity share capital and free reserves of the company," the company announced in a regulatory filing.
The company further added that the Buyback Size does not include any expenses incurred or to be incurred for the Buyback like filing fees payable to the Securities and Exchange Board of India, brokerage, applicable taxes, advisors' fees, public announcement publication expenses, printing and dispatch expenses and other incidental and related expenses.
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).
SP Apparels is one of the leading manufacturers and exporter of knitted garments for infants and children in India. The stock is up about 5% in 2022 (YTD) so far and is up over 41% in a year's period as compared to about 0.1% rise in benchmark BSE Sensex.
