Aurobindo Pharma Ltd. shares will be in focus on Friday as the stock goes ex-trade for its proposed buy back of equity shares. The board has also set April 17 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.
The company will repurchase 54,23,728 fully paid-up equity shares, representing up to 0.93% stake, at a price of Rs 1,475 per share for an aggregate amount of Rs 800 crore.
The buy back is proposed to be made from all of the equity shareholders, including the promoters and members of the promoter group, on a proportionate basis through the “tender offer” route, according to a stock exchange filing said.
As of Dec. 31, 2025, promoters held 51.82% equity in Aurobindo Pharma, mutual funds 19.52%, insurance companies 5.5%, foreign portfolio investors 13.94% and retail investors 7.93%.
The company last repurchased shares from the market in July 2024.
Buyback Details
Eligible shareholders will receive a letter of offer through electronic mode only, within two working days from the record date, along with a Tender Offer form indicating the entitlement of the eligible shareholder for participating in the buyback. Even if the shareholder does not receive the Letter of Offer along with a tender form, he/she may participate and tender shares in the buyback.
The equity shares proposed to be bought back shall be divided into two categories: reserved category for small shareholders and general category for all other eligible shareholders.
A small shareholder is the one who holds equity shares whose market value, on the basis of the closing price on the exchanges having the highest trading volume as on the record date, is not more than Rs 2 lakh.
In accordance with regulation, 15% of the number of equity shares which the company proposes to buy back or the number of Equity Shares entitled as per the shareholding of Small Shareholders as on the Record Date, whichever is higher, shall be reserved for the Small Shareholders as part of this Buyback.
Taxation
Starting this month, the shareholder is responsible for paying the capital gains tax on share buy backs. The amount an investor receives is treated as capital gains, and he/she can deduct the cost of acquiring the tendered stocks from the buyback proceeds. The applicable tax rate depends on how long the investor held the stocks:
- Long-term (held for more than 12 months): 12.5% capital gains tax.
- Short-term (held for 12 months or less): 20% capital gains tax.
Companies pay 20% on the distributed income for non-promoters, while promoters face higher taxes.
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