Buyback to boost shareholder confidence: Maha Seamless

Saket Jindal, MD, Maharashtra Seamless says the company's Rs 550 crore liquid cash, currently invested only in mutual funds, will be utilised in the future for capex 

The company's stock rallied up to 10 percent to Rs 236 on Tuesday morning, after it approved to buyback of shares worth Rs 100 crore at Rs 300 per share. The buyback is within 10 percent of the paid up capital and free reserves of the company.

"This is to create confidence in shareholders that the company has confidence in the performance and in the future outlook," he told CNBC-TV18 in an interview.

Below is the verbatim transcript of Saket Jindal’s interview on CNBC-TV18

Q: Could you give us details in terms of how much are you looking to buy back and how much do you want the promoter stake to go up to?

A: We had a board meeting yesterday and we decided to buy back from the market approximately Rs 100 crore worth of shares. The maximum price will be Rs 300 and below Rs 300 we will buy back well above the current market price. This is to create confidence in shareholders that the company has confidence in the performance and in the future outlook. So we want to create confidence in the shareholders.

Q: How much cash does Maharashtra Seamless have at this point and do you have any other uses for this cash?

A: Currently, we have Rs 550 crore of liquid cash. We will be utilising it in the future for capex, but currently it has not been utilised and is sitting in mutual funds. So, we thought it was a good decision to buy back.

Q: You start commencing purchases immediately at the current market price up to a price of Rs 300?

A: Yes. The formalities have to be looked into; we will have to appoint a merchant banker and a broker. This is a broad idea and we will have to go into the details a bit more.