Reliance Industries has bought back shares worth over Rs 3,900 crore from public shareholders through an about year-long share repurchase programme, achieving just about 38 per cent of the target.
The share buyback programme, the largest-ever by an Indian company, concluded yesterday, but the final figure might change as the data has been disclosed on the stock exchanges only for shares bought back till January 16.
Billionaire industrialist Mukesh Ambani-led Reliance Industries (RIL) began the buyback programme on February 7, 2012 with a target to repurchase shares worth about Rs 10,440 crore from the public shareholders. The company had offered to buyback the shares at a price of up to Rs 870 each under the programme.
The company said in a notification that the buyback of equity shares, as approved by its board of directors on January 20 last year, closed on January 19, 2013, but did not disclose the final tally.
According to data available with the stock exchanges, RIL bought back about 4.62 crore shares, estimated to be worth Rs 3,951 crore, till January 16.
The buyback programme had begun on a slow pace, but gained some momentum in May 2012, when the stock price fell below Rs 700.
The programme was announced with an aim to shore up the value of RIL shares, which had underperformed the markets in 2011. However, The stock have gained nearly 15 per cent in the past one year, but it is still lower than the gains registered by the market benchmark index Sensex.
The stock is currently trading near Rs 900 level, which is much higher than the maximum price of Rs 870 per share fixed for the buyback.
Market analysts believe the purpose of the buyback was price stability and ensuring investor confidence in the stock, which the company has successfully achieved.
According to CNI Research Head Kishor Ostwal, the success of buyback offers depends on many factors like willingness to buy the proposed shares and premium sustainability.
"In fact, many corporate houses failed to utilise the entire corpus targeted for the purpose in past and many firms even discontinued buying activities despite shares being available well below maximum buyback price," he added.
Citigroup Global Markets, HSBC Securities & Capital Market and DSP Merrill Lynch were the managers for the offer.
Reliance stock price
On November 27, 2015, Reliance Industries closed at Rs 979.05, down Rs 8.65, or 0.88 percent. The 52-week high of the share was Rs 1067.00 and the 52-week low was Rs 796.75.
The company's trailing 12-month (TTM) EPS was at Rs 74.73 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 13.1. The latest book value of the company is Rs 667.36 per share. At current value, the price-to-book value of the company is 1.47.
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