R-Infra board okays share buyback of Rs 1,000 cr

Reliance Infrastructure (R-Infra) on Monday said it would spend around Rs 1,000 crore to repurchase its shares from the market. The Reliance Anil Dhirubhai Ambani (ADA) Group company will pay Rs 725 a share, a 17 per cent premium to its last closing price.

“Our share is trading at 32 per cent discount to our book value,” R-Infra Director Lalit Jalan said. Its shares on Monday closed 1.85 per cent higher at Rs 627 on the Bombay Stock Exchange (BSE). In a filing to the BSE, it said the company board had approved the share buyback plan.

Apart from a positive impact on the stock price, the company hopes the buyback will reduce the number of outstanding shares, increase earnings per share and improve return on networth. The company has done three buybacks till date for Rs 923 crore.

Shares in companies belonging to the Reliance ADA Group tumbled last week, which the group attributed to a bear carteling. It also lodged a complaint with the Securities and Exchange Board of India on the same.

Net rises 10%
Meanwhile, R-Infra on Monday reported a 10 per cent rise in its third-quarter net profit at Rs 405 crore, compared to Rs 368 crore a year earlier. Revenue jumped 14 per cent to Rs 3,744 crore from Rs 3,286.5 crore.

“We gave a sales guidance that we will reach more than Rs 4,000 crore for the year. And, we are on the way to achieve that,” said Jalan.

The company had an engineering, procurement and construction orderbook worth Rs 23,500 crore at the end of the third quarter.

Jalan said the EPC revenue stream, along with infrastructure business, will be the high growth sectors of the company, while its electricity distribution business had an organic growth rate of six per cent.

The company said it planned to commission at least three infrastructure projects, Delhi metro project and two highway projects — Delhi to Agra and Hosur to Krishnapur, in the fourth quarter.

R-Infra said it had financially closed 22 of its 25 projects under development and the rest will be closed within 35-40 days. “The three projects have already received funding from the lead arranger and are up for syndication. We are accessing a large part of the money from overseas, and taking substantial portions from ECB and ECA funding,” said Jalan.