Aurobindo Pharma announces up to Rs 750-crore share buyback at Rs 1,460 per share

Aurobindo Pharma announces up to Rs 750-crore share buyback at Rs 1,460 per share

Aurobindo Pharma on July 18 announced that share buyback worth up to Rs 750 crore at Rs 1,460 per share.

"The Board approved buyback of up to 51.36 lakh fully paid-up equity shares of the Company, each having a face value of Rs 1, representing up to 0.88% of the total number of equity shares in the paid-up equity share capital of the Company, at a price of Rs 1,460 per equity share payable in cash for an aggregate amount up to Rs 750 crore," said the pharma firm in a stock exchange filing.

The buyback will be done through the tender offer route, said the firm.

July 30, 2024 has been fixed as the record date for the purpose of determining the entitlement and the names of equity shareholders who would be eligible to participate in the buyback, said Aurobindo Pharma.

"8-12 PE is right valuation for unbranded generic models. If the stock is below that it will be a good trade to get into. Unbranded generic stocks can mostly be trades and not structural buys because the businesses are so volatile. The one off product opportunities keep coming and going, so you have to be clear about you entry and exit points," Aditya Khemka of InCred told Moneycontrol.

"Aurobindo Pharma pared most of their debt but some of the debt is still there. A buyback is a good move for any company because you are returning capital to shareholders, which also indicates you are not finding new opportunities to deploy capital. One has to therefore think about what kind of growth these companies can deliver if they are willing to return capital and not build capacity," added Khemka.