Home >News >India >Rites board approves buyback of shares up to 257 crore
The share purchase will be made at  ₹265 apeice, a 3.81% or  ₹9.75 premium to its Friday closing price .mint (MINT_PRINT)
The share purchase will be made at 265 apeice, a 3.81% or 9.75 premium to its Friday closing price .mint (MINT_PRINT)

Rites board approves buyback of shares up to 257 crore

  • Currently, the government holds 72.02% stake in the company
  • In August, RITES Ltd had announced dividend of 6 per share, which was in addition to the earlier two interim dividends taking the dividend payout of the company to 67% on the standalone net profit of FY 19-20

Board of state-run RITES Ltd has approved buyback of shares worth upto 257 crore. The share purchase will be made at 265 apeice, a 3.81% or 9.75 premium to its Friday closing price. The share closed at 255.25, up 2.80 or 1.11% on the BSE.

“Board of directors has approved buy-back of 96,98,113 equity shares of face value of R .10 each at 265 per share, translating into the total buy back amount not exceeding 257 crore," the company said in a statement to the exchanges. The board fixed 30 September as record date for the purpose of ascertaining the eligibility of shareholders for the buyback.

Rajeev Mehrotra, Chairman and Managing Director, RITES Ltd said, “The company has strong financial fundamentals with debt free balance sheet. This repurchase reflects management’s confidence in the company and growth prospects in the sectors and geographies, where we operate."

Currently, the government holds 72.02% stake in the company. The company was listed in July 2018. The issue with a price band of 180- 185 was oversubscribed 66.74 times.

“RITES usually generate good cash flow each year. Mostly, company used to reward shareholders with dividends as it doesn't need excess cash in the business. One month back the company paid a final dividend. We believe it makes sense for the Company to give out excess cash to shareholders so that it does not put pressure on the company's return ratios," said Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd.

In August, RITES Ltd had announced dividend of 6 per share, which was in addition to the earlier two interim dividends taking the dividend payout of the company to 67% on the standalone net profit of FY 19-20.

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