Bosch declines 2% as buyback price fails to lift investor sentiment

NEW DELHI: Shares of Bosch slipped 2 per cent in Monday's trade after the company approved the share buyback plan on Friday at a price not exceeding Rs 23,000, which was mere 1.75 per cent higher than its closing price for the day.

The company’s board approved the share buyback proposal post market hours on Friday. Following the development, the stock fell 2.22 per cent to hit a low of Rs 22,100 on BSE. This was the third day of fall for the scrip. The company on Friday told stock exchanges that it intends to buy back 8.78 lakh shares of the face value of Rs10 each at a price of Rs 23,000 per share for a total sum not exceeding Rs 2,019.76 crore.

“The board of directors of the company at its meeting held on July 1 approved the buyback of 8,78,160 fully paid up equity shares of face value Rs 10 each per share (representing 2.796 per cent of the total paid-up equity share capital) of the company at a price of Rs 23,000 aggregating to Rs. 20,197,680,000,” the company told the exchange.

The buyback represents 24.99 per cent of the paid-up share capital and free reserves. The company said it would buy back shares on a proportionate basis through the “tender offer” route using the stock exchange mechanism as prescribed under the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998.

The buyback is subject to approval of the members through a postal ballot, it said adding that the Robert Bosch GmbH, the promoter of the company, will also participate in the same.