Gujarat Narmada has announced that it will buy back 84 lakh shares worth Rs 652.82 crore.
The total number of shares that the company will buy back amounts to 5.46% of the total equity.
What is the offer price?
The maximum price of the share buyback has been set at Rs 770, which is at a premium of 11.2% to Wednesday's closing price.
Tender offer or open market?
The buyback will be done through the tender offer route.
In a tender offer buyback, the company announces a fixed price at which it will buy back shares from existing shareholders. For example, Wipro Ltd.'s buyback was fixed at Rs 445 per share.
Gujarat Narmada Valley Fertilizers and Chemicals buyback has an upside price cap of Rs 770.
When is the buyback?
The dates of the opening and closing of the buyback have not yet been disclosed.
Record date is set for Nov. 24.
How many shares tendered will get repurchased?
The number of shares that the company will repurchase depends on the acceptance ratio.
According to SEBI rules, 15% of the total tender offer is reserved for the small shareholder category—an investor with an investment of not more than Rs 2 lakh in the company, as of the record date. The small shareholder category holding stands at 23%, or 3.53 crore shares.
Around 15% of the buyback offer of 0.85 crore shares would be reserved for the company's small shareholders, which amounts to 0.12 crore shares. Hence, the acceptance ratio for the retail category would be 3.60%.
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