Agrochemical firm UPL Ltd today approved the buyback of upto 1.40 crore shares from the market by paying cash with aggregate amount not exceeding Rs 308 crore as the present value of shares does not reflect its true valuation.
In its meeting held today, the Board of the company has approved the buyback of shares at a maximum price of Rs 220 per share, UPL said in a BSE filing.
"... approval of board of directors be and is hereby accorded for purchase of up to 1.40 crore fully paid up equity shares of Rs 2 each at a price not exceeding Rs 220 payable in cash, up to an aggregate amount not exceeding Rs 308 crore," it added.
According to the filing, the Chairman of the company informed the board that present market value of equity shares does not reflect its true valuation. One of the ways to get true valuation will be to make buyback of shares from themarket.
The company has sufficient financial resources. These resources can be gainfully employed in buyback of shares which will increase shareholder value, it said.
"... buyback will result in reduction of number of shares accompanied by possible increase in earnings per share and return on capital," it added.
UPL, which was formerly known as United Phosphorus, had reported a consolidated net profit for the second quarter at Rs 154.63 crore as against Rs 119.80 crore in the same quarter last year.
The company has 23 manufacturing sites, out of which nine are in India, four in France, two in Spain, three in Argentina, one each in UK, Vietnam, Netherlands, Italy and China.
Shares of the company closed at Rs 194.90 apiece, up 0.85 percent on the BSE.
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