GNFC in focus ahead of Dec 1 launch of Rs 653-crore share buyback issue

The two promoters, Gujarat State Fertilizers & Chemicals and Gujarat State Investments have a shareholding of 41.18 percent.

GNFC will be in focus as the company announced to launch its share buyback programme on December 1 and close it on 7th. GNFC plans to repurchase 84.78 lakh equity shares at a price of Rs 770 each so that the total amount does not exceed Rs 652.81 crore.

The share buyback represents 5.46 percent of the existing total paid-up equity capital of GNFC. The record date for determining the buyback entitlement and eligible shareholders is November 24.

On November 29, shares of GNFC settled 0.3 percent higher on the NSE at Rs 688.25 apiece. Compared to the closing price, the buyback offers shareholders a premium of 11.9 percent.

The buyback is planned to return surplus funds to the equity shareholder, which are over and above its ordinary capital requirements and in excess of any current investment plans, in an expedient, efficient and cost-effective manner, said the company in a regulatory filing.

Follow our market blog to catch all the live updates

“The buyback will improve financial ratios like earnings per share, return on capital employed, return on equity, by reduction in the equity base of the company, thereby leading to long term increase in shareholders’ value,” added the company, adding that the management strives to increase shareholders’ value.

The two promoters, Gujarat State Fertilizers & Chemicals and Gujarat State Investments, hold 41.18 percent in the company. After the buyback, the aggregate shareholding of the promoter will increase to 41.3 percent, according to the offer.

The promoters have also expressed their intention to participate in the buyback, and will tender around 35 lakh shares.