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Pidilite Industries hit new record high of Rs 924, up 4% on the BSE in early morning trade after the company announced that its board will meet on Tuesday, December 26, 2017 to consider the proposal to buyback the equity shares of the Company. In a filing to the BSE on December 20, the company said, “Pidilite Industries has informed that a meeting of the Board of Directors of the Company will be held on December 26, 2017, inter alia, to consider the proposal to buyback the fully paid-up equity shares of the Company.” As of September 2017, promoter holding in Pidilite Industries stands at 69.59%.
While foreign portfolio investors holds 10.92% stake, followed by individual shareholders (9.28%), insurance companies (4.71%), mutual funds (3.44%) and bodies corporate (1.63%), shareholding pattern data shows. The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple. The other objective is to improve earnings per share (since the same dividend amount is now distributed among fewer shares). However, Pidilite Industries has outperformed the market by surging 56% thus far in the calendar year 2017, compared to 27% rise in the S&P BSE Sensex.