Care Ratings plans 10% share buyback
The company’s shares have shot up 5% in the past five trading sessions.
MUMBAI: Credit Analysis and Research Limited or Care Ratings, which counts Franklin Templeton and LIC as its promoters, is planning about 10% share buyback, for which it may seek the approval of its board within a month or two, two people familiar with the matter told ET.
Once approved, the exercise that may offer exiting investors an opportunity to book handsome gains since the rating firm may offer an attractive premium, said one of the persons, who did not wish to be identified.
As per current market capitalisation, the exercise will involve buyback of about 29.5 lakh shares for nearly Rs 430 crore.
An email sent to Care Ratings seeking comments on the matter did not elicit any response till late evening on Monday.
In a share buyback, a company makes an offer to buy a certain number of shares at a specific price directly from shareholders, reducing the number of outstanding shares in the secondary market.
The public listed company is run by a professional management team, ranks among India’s leading ratings firms.
More than a dozen marquee investors including Morgan Stanley, Goldman Sachs, Government of Singapore, Tata Steel, DSP Blackrock Mutual Fund and SBI Mutual Fund have invested in Care Ratings, whose promoters do not hold any shares.
The company’s shares have shot up 5% in the past five trading sessions, compared to just over 0.5% increase in the benchmark index Sensex.
On standalone basis Care Ratings reported a 29% jump in its profit for 2016-17 to Rs 152 crore from a year ago. Its total assets at the end of the fiscal amounted to Rs 553 crore.
In the past few months cash-rich companies such as TCS, Bayer CropScience and HCL Technologies have announced share buyback plans.
HCL Technologies, the country’s fourth largest software services firm, said it will buy back shares at Rs 1,000 apiece, at an estimated 17% premium over the price in the secondary market about two weeks ago.
India’s largest software services firm TCS said in April that its shareholders had approved a Rs 16,000-crore share buyback plan while Bayer CropScience said it is considering a share buyback plan at the company board level.
Once approved, the exercise that may offer exiting investors an opportunity to book handsome gains since the rating firm may offer an attractive premium, said one of the persons, who did not wish to be identified.
As per current market capitalisation, the exercise will involve buyback of about 29.5 lakh shares for nearly Rs 430 crore.
An email sent to Care Ratings seeking comments on the matter did not elicit any response till late evening on Monday.
In a share buyback, a company makes an offer to buy a certain number of shares at a specific price directly from shareholders, reducing the number of outstanding shares in the secondary market.
The public listed company is run by a professional management team, ranks among India’s leading ratings firms.
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More than a dozen marquee investors including Morgan Stanley, Goldman Sachs, Government of Singapore, Tata Steel, DSP Blackrock Mutual Fund and SBI Mutual Fund have invested in Care Ratings, whose promoters do not hold any shares.
The company’s shares have shot up 5% in the past five trading sessions, compared to just over 0.5% increase in the benchmark index Sensex.
On standalone basis Care Ratings reported a 29% jump in its profit for 2016-17 to Rs 152 crore from a year ago. Its total assets at the end of the fiscal amounted to Rs 553 crore.
In the past few months cash-rich companies such as TCS, Bayer CropScience and HCL Technologies have announced share buyback plans.
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HCL Technologies, the country’s fourth largest software services firm, said it will buy back shares at Rs 1,000 apiece, at an estimated 17% premium over the price in the secondary market about two weeks ago.
India’s largest software services firm TCS said in April that its shareholders had approved a Rs 16,000-crore share buyback plan while Bayer CropScience said it is considering a share buyback plan at the company board level.
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