Aarti Drugs Ltd. has seen its shares rise by 10% in anticipation of an upcoming board meeting to consider a new share buyback. The board is scheduled to meet on August 26, 2024, to discuss the buyback of equity shares with a face value of ₹10.
Key Details:
- Board Meeting Date: August 26, 2024
- Purpose: Consideration of sixth share buyback since 2016
- Previous Buybacks: The company has conducted share buybacks in 2018, 2019, 2021, and 2023
- Regulatory Framework: A 365-day cooling-off period is required between buybacks under SEBI regulations
Aarti Drugs has a history of rewarding shareholders with share buybacks and free shares. The previous buyback was approved on July 21, 2023. Additionally, the company issued one free share for every share held in 2015 and three free shares per share held in 2020.
Buyback Mechanism:
- Options: The new buyback could be executed through a tender offer or an open market mechanism
- Recent Trends: Most recent buybacks have used the tender offer route, where shares are bought back at a pre-determined price
Since the Budget 2024 announcement on July 23, there has been a surge in buyback announcements. The Budget introduced a change where income from share buybacks will now be taxed in the hands of the shareholders, effective October 1.
As of 9:30 am, Aarti Drugs shares were trading 7.63% higher at ₹574.75 on the NSE.
