Textile company Welspun India's board of directors will consider a proposal to buyback the company's equity shares in its board meeting scheduled for April 27, according to an exchange filing on April 24. The company also said that the Board would discuss dividend matter for the financial year 2022-23.
The stock exchange filing did not specify the quantum of share buyback and dividend amount Welspun India's board of directors will consider and as part of the proposal.
"..... the Board of Directors will, inter alia, consider the following agenda at its meeting scheduled to be held on Thursday i.e April 27, 2023. 1. Buyback of Equity Shares of the Company; 2. Recommendation of dividend for the year ended March 31, 2023," Welspun India said in a regulatory filing.
The outcome will be known after the conclusion of the Board meeting on April 27.
A buyback is expected to generally enhance the return on equity by distributing cash and reducing the equity base, eventually resulting in an increase in long-term value for shareholders. Moreover, the buyback would offer shareholders an opportunity to increase their stake in the company by improving the percentage of their holding and hence improve earnings per share in the long-term.
The company has a good dividend track report and has consistently declared dividends for the last 5 years. The last buyback carried out by Welspun India was in FY2021-22.
For the year ending March 2022, Welspun India declared an equity dividend of 15% amounting to Rs 0.15 per share.
Welspun Group was in the news last month when it announced the acquisition of water tank maker Sintex for Rs 1,251 crore to expand its building material portfolio.
The Mumbai-based company is also expected to announce its earnings results for the fourth quarter for the financial year 2022-23 after the Board meeting on April 27.
The home textiles manufacturer reported a bigger-than-expected 68% slump in third-quarter profit. Its consolidated net profit fell to Rs 42.38 crore for the quarter that ended December 31 from Rs 132 crore a year earlier.
The company's stock on the BSE closed at Rs 83,06 on April 21, down 0.49% over the previous day's close. It touched an intraday high of Rs 83.97 and an intraday low of Rs 82.94.
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