Home / News / India /  Zydus Lifesciences' share buyback opens today. What investors should know

Zydus Lifesciences' share buyback offer worth 750 crore will open today and conclude on Wednesday, July 6, 2022. The company has announced to buyback shares at 650 per equity share. The company's board has approved the proposal to buyback a little over 1.15 crore shares, representing up to 1.13% of the total paid-up equity share capital of the company, for an aggregate amount of up to 750 crore. 

The share buyback will be tender-based on a proportionate basis. The drug firm, earlier known as Cadila Healthcare, has fixed July 15, 2022 as the last date for the settlement of bids on stock exchanges which may even happen early.

The company further informed that the buyback Size represents 6.85% and 4.36% of the aggregate of the total paid-up equity share capital and free reserves as per the latest audited standalone and consolidated financial statements of the company as at March 31, 2022, respectively.

The company fixed June 2, 2022 as the record date for the purposes of determining the entitlement and names of the equity shareholders who would be eligible to participate in the buyback.

All equity shareholders/ beneficial owners of the equity shares, including promoters, who hold shares as on the record date, will be eligible to participate in the buyback except any shareholders who may be specifically prohibited under the applicable laws by appropriate authorities, it added.

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).

Shares of Zydus Lifesciences have plunged over 45% in a year's period, whereas the pharma stock is down more than 27% in 2022 (YTD) so far as compared to 12% fall in benchmark Sensex during the said period.

The pharmaceuticals firm reported a 41% decline in consolidated net profit at 397 crore in the fourth quarter ended March, impacted by higher expenses and one-off inventory related provisions. Its revenue from operations rose to 3,863.8 crore from 3,670 crore in the year-ago quarter.

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