Cera Sanitaryware Ltd. has announced a significant share buyback plan, which led to a slight increase in its stock price on Monday, August 5. The company’s board has approved a buyback of up to 1.08 lakh equity shares, which represents 0.83% of the total paid-up equity share capital. This move is set to cost the company ₹130 crore.
Key Details:
- Buyback Amount: ₹130 crore
- Number of Shares: Up to 1.08 lakh shares
- Price per Share: ₹12,000
- Premium: 34% above the closing price on Friday
- Record Date: August 16, 2024
The buyback price of ₹12,000 per share is a 34% premium over the closing price from the previous Friday. Share buybacks are often used by companies as a tax-efficient method to return cash to shareholders. They reduce the number of shares in circulation, which can increase the value of remaining shares.
This is the first buyback initiative ever announced by Cera Sanitaryware. The company’s last bonus issue was in 2010 with a 1:1 ratio. Earlier this year, Cera declared a final dividend of ₹60 per share, following a ₹50 per share dividend in 2023.
As of the end of the June quarter, the promoters of Cera Sanitaryware held a 54.48% stake in the company. Mutual funds hold 6.80% of the company’s shares..