FIIs purchase more shares than DLF promoters in buyback period

Promoters of realty major DLF today said they could acquire about 76.4 lakh shares in its just concluded buyback offer that continued for about seven months, but overseas investors purchased over ten times more shares during the same period. Interestingly, the shares purchased by promoters during the buyback period, which started on October 17 last year and ended yesterday, accounts for just 12.79 per cent of the maximum size of the offer proposed by DLF.     

The development coincides with the market regulator SEBI reportedly mulling steps for clamping down on 'hollow' buyback offers where companies announce plans to repurchase shares and boost share prices, but actually buy few number of shares. Announcing the closure of its buyback offer, DLF said today that it purchased an aggregate of 76,38,567 shares for a total amount of Rs 140.69 crore. These shares were purchased at an average price of Rs 184.19 per share.     

Assuming the same average price for the shares purchased by FIIs between the announcement and closure of the buyback offer, they purchased about 8.06 crore shares for an estimated amount of Rs 1,485 crore. This average price is 36 per cent below the company's current market price of around Rs 251 each. "Pursuant to buy back, the company has bought back less than one per cent of the total number of outstanding equity shares," DLF said in a public announcement. 

  "The company has purchased an aggregate of 76,38,567 equity shares pursuant to the buyback and the company has already extinguished 76,36,567 equity shares till date and is in the process of extinguishing further 2,000 equity shares," the announcement stated. Post-buyback, the promoter holding in the company has increased marginally to 88.55 per cent, from 88.15 per cent before the buyback. During the same period, the holding of FIIs has increased considerably from 6.68 per cent to 11.45 per cent.  

    The public announcement for the offer was made on September 30, while the offer began on October 17. DLF had said in a filing to the Bombay Stock Exchange on May 2 that, "The company having purchased the requisite minimum number of equity shares has decided to close the buyback with effect from May 6. "