The board of directors of Dwarikesh Sugar Industries Ltd has approved a share buyback not exceeding ₹31.50 crore. The buyback price is set at ₹105 per share. This decision was made during the company’s board meeting on March 8, 2024, with March 20, 2024, designated as the record date for the buyback. The board has also sanctioned the buyback of up to 30 lakh company shares through the tender route.
Dwarikesh Sugar’s share price surged 6.8% in Monday morning’s trading to ₹86.8 per share. However, it has since retreated from early gains and is currently trading 2.8% higher at ₹83.4 per share.
The company has set March 20, 2024, as the record date for its buyback, to be carried out via the tender offer route.
In the latest quarterly results for Q3FY24, the company saw an 18% revenue decline, totaling ₹312 crore compared to ₹383 crore in the same quarter last year. Additionally, net profit also fell by 7% year-on-year to ₹9.8 crore for Q3FY24.
Over the past 12 months, Dwarikesh Sugar’s share price has recorded a negative return of 12% due to regulatory challenges in the sector.
Dwarikesh Sugar’s share buyback announcement
Dwarikesh Sugar Industries Ltd announced its share buyback to the Indian stock market exchanges, stating, “The Board of Directors approved the buyback of 30,00,000 fully paid-up equity shares with a face value of Re. 1 each during its meeting on March 8, 2024. This buyback constitutes 1.59% of the total paid-up Equity Share Capital of the Company at a price of Rs. 105 per Equity Share. The total value of this buyback is up to ₹31.50 crores, representing 4.49% of the aggregate of the fully paid-up Equity Share capital and free reserves as per the latest audited financial statements of the Company as of March 31, 2023.”
The buyback will use a proportionate ‘tender offer’ method. Shareholders holding shares as of the record date, March 20, 2024, can take part. They can offer a portion of their shares at the buyback price,” the company explained.
Dwarikesh Sugar’s buyback: Important information
1] Dwarikesh Sugar’s buyback price: The company’s board announced a buyback price of ₹105 per equity share.
2] Dwarikesh Sugar’s buyback date: The company’s board of directors set March 20, 2024, as the record date for the share buyback.
3] Dwarikesh Sugar’s buyback process: The company’s board stated that the share buyback will utilize the tender mechanism.
4] Dwarikesh Sugar’s buyback scale: The board sanctioned the repurchase of up to 30 lakh company shares, resulting in a buyback offer size of approximately ₹31.50 crore.
5] Dwarikesh Sugar’s buyback premium: With Dwarikesh Sugar’s share price closing at ₹81.40 each on the NSE, the buyback offer is at a premium of nearly 30 percent.
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