Akzo Nobel shares climb 5% on buyback plan

Shares of Akzo Nobel India advanced nearly 10 per cent on Wednesday after the company informed bourses that its board will meet on April 6, 2018, to consider a proposal to buyback equity shares.

Shares of the company opened at Rs 1,895 and touched a high and low of Rs 1,980 and Rs 1,875, respectively, eventually closing at Rs 1,933.50, up 7.33 per cent.

The announcement of buyback was made after market hours on Tuesday.


Shares of the company had scaled their 52-week high of Rs 2,095 on April 27, 2017 and 52-week low of Rs 1,688 on February 6, 2018.

On the BSE, 1,730 shares were traded on the counter so far, compared with average daily volumes of 490 shares in the past two weeks.

Akzo Nobel India manufactures and markets a wide range of coatings and paints.

Kotak Securities last month initiated coverage on Akzo Nobel with a target price of Rs 2,250.

“Amongst the established players in an oligopoly market, Akzo trades at a discount to peers and market leader. We prefer to use a P/E approach to value the stock (like any other consumer company) and give a value of 35x FY20E earnings which is the average one year forward multiple for the company and also at 22 per cent discount to PE multiple of peers and arrive at a target price of Rs 2250. We believe the valuation gap to narrow between Akzo and other players and which is one of the key triggers for the stock,” Kotak said in a research report in March.