KPR Mill drops 6% as firm cancel share buyback

NEW DELHI: Shares of KPR Mill dropped 6 per cent in Friday’s trade after the company withdrew its proposed Rs 263.31-crore share buyback plan citing newly imposed tax obligations on such offerings.

The company said it found it difficult in meeting the obligations beyond the amount approved by the board of directors and shareholders. With this, it became the first company to withdraw its offer following the introduction of 20 per cent buyback tax.

“We have today (Thursday) filed with Sebi our communication conveying that the increase in the amount of buyback obligation due to the tax proposal in the Finance Bill 2019 was neither contemplated nor prevailing at the time of the consideration and the approvals of the board and shareholders,” the company told exchanges.


The scrip closed 2.29 per cent lower at Rs 594.05 on BSE.

KPR Mill had announced on April 30 announced its plans to buy back as many as 37.51 lakh equity shares, representing 5.17 per cent of equity shares at a price of Rs 702 apiece for a consideration, not exceeding Rs 263.31 crore.

The government’s budget proposal to tax buybacks by listed companies could affect at least half a dozen share repurchases worth Rs 10,000 crore that are already in progress. Previously, only share repurchases by unlisted companies were subject to such a tax.