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Last Updated : Jul 12, 2019 05:16 PM IST | Source: Moneycontrol.com

KPR Mill falls 2% on withdrawal of buyback proposal

With a view to discourage the practice of avoiding dividend distribution tax through buyback of shares by listed companies, Finance Minister proposed an additional tax of 20 percent in case of buyback of shares by listed companies.

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Shares of KPR Mill was trading lower by over 2 percent intraday on July 12 after the company decided to cancel its buyback plan on the back of newly imposed tax obligations on such offerings,

The decision pushed the scrip to its lowest level since April 15, 2019.untitled

“We have today (Thursday) filed with SEBI our communication conveying that the increase in the amount of buyback obligation due to the tax proposal in the Finance Bill 2019 was neither contemplated nor prevailing at the time of the consideration and the approvals of the board and shareholders,” the company told exchanges.





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JN Gupta, Former ED at SEBI told CNBC-TV18 that KPR Mill will have to approach capital market regulator for an exemption.

"Once letter of offer is filed & public announcement made, buyback can't be withdrawn. Company can’t withdraw buyback once record date has passed," he said.







The company on June 10, 2019, said in a filing to the exchanges that it is undertaking a Buyback, in accordance with the Companies Act, 2013, as amended, the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, (“Buyback Regulations”), and Rule 20 and 22 of the Companies (Management and Administration) Rules, 2014 (the “Management Rules”)and other applicable laws.

With a view to discourage the practice of avoiding dividend distribution tax (DDT) through buyback of shares by listed companies, Union Finance Minister Nirmala Sitharaman last week proposed an additional tax of 20 percent in case of buyback of shares by listed companies.

At 1112 hrs KPR Mill was quoting at Rs 596.75, down Rs 11.25, or 1.85 percent. It has touched an intraday high of Rs 598.50 and an intraday low of Rs 570.05. The stock also saw a spurt in \volume by more than 15.77 times. It was trading with volumes of 20,897 shares, compared to its five day average of 1,856 shares.
First Published on Jul 12, 2019 11:33 am
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