Natco Pharma announces Rs 210 crore share buyback; stock rises
Natco Pharma shares buyback: Drugmaker through an exchange filing said that it plans to buy back 30 lakh shares which is 1.64 per cent of the paid-up equity shares of the company.
Natco Pharma shares buyback: Natco Pharma – a Hyderabad-based small-cap pharma company – on Wednesday announced a share buyback plan of Rs 210 crore through an open market route with a price not exceeding Rs 700 per equity share.
Immediate after the buyback announcement, the intraday chart of Natco Pharma showed a sharp spike as the stock on Wednesday gained as much as Rs 580 per share, up 2.5 per cent from Monday’s close. The Indian equity markets were shut on Tuesday, on account of the Holi festival.
The buyback price is set at a premium of 23 per cent to the counter’s previous day's closing price of Rs 566 per share on the BSE. At around 12:35 PM today, Natco Pharma shares quoted Rs 571.50 per share, up Rs 5.35 or 0.94 per cent on the BSE.
Drugmaker through an exchange filing said that it plans to buy back 30 lakh shares which is 1.64 per cent of the paid-up equity shares of the company.
According to Natco Pharma, “If the equity shares are bought back at a price below the maximum buyback price, the actual number of equity shares bought back could exceed the indicative maximum buyback shares but will always be subject to the maximum buyback size.”
Also Read: Pharma stocks a mixed bag as drug regulator NPPA fixes retail price of 74 drug formulations
It further added that the buyback shall not exceed the maximum buyback size, which represents 5.13 per cent and 5.04 per cent of the aggregate of the total paid-up capital and free reserves of the company, according to a statement.
The company has also constituted a buyback committee, which includes the Managing Director VC Nannapaneni; Director & Chief Executive Officer Rajeev Nannapaneni, and Director & Executive Vice President (Corporate Engineering Services) PSRK Prasad.
Also Read: As Cipla shares tanks 5%, check why pharma stocks are seeing a declining trend
When a company buys its own outstanding shares to reduce the number of shares available on the open market can be termed a buyback, which is also known as a share repurchase.
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