Management trying to enhance shareholder value via buyback: Jindal Polyfilms

In an interview with ET Now, Samir Banerjee, whole time director, Jindal Polyfilms, gives his views on the buyback of shares. Excerpts:

ET Now: Your buyback for 40 lakh shares opens today. Could you highlight for us the rationale behind this buyback?

Samir Banerjee: The management thought there is good value in the shares at the moment which will enhance the shareholders’ value. So they opted for the buyback.

ET Now: How will the buyback be funded and what is the cash on the company’s books at the current juncture?

Samir Banerjee: The buyback has been funded by the company’s own resources. There were free reserves of about Rs 1600 crore as on March 31, 2011. It hopes to finance the buying through its own resources.

ET Now: From a high of 570 to a share your stock has stumbled to sub 200 levels. It is a 25% correction that we have seen and it has been shaved off from your market capitalisation in the month of November alone. Do you think the buyback will help reaffirm investor faith in the stock as well?

Samir Banerjee: Yes, some amount of confidence should return only in the stock as the buyback goes on.