FDC surges 8% as board to consider share buyback proposal

The company's board will meet on February 9, 2022 to consider the proposal for buyback of equity shares of the company through tender offer route.

Shares of FDC surged 8 per cent to Rs 319 on the BSE in Monday’s intra-day trade after the company said that its board will meet on February 9, 2022 to consider the proposal for buyback of equity shares of the company through tender offer route.

At 09:26 am; the stock of pharmaceutical company traded 7 per cent higher at Rs 314.75, as compared to 0.5 per cent decline in the S&P BSE Sensex. In the past six months, the stock has declined 14 per cent, as against a 8 per cent rise in the benchmark index. It has shed 21 per cent from its 52-week high of Rs 404.90 touched on June 15, 2021..

Buyback is a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than market price. 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 price to earnings (P/E) multiple.

In tender offer, shareholders will have the option to submit (or tender) a portion or all of their shares Within a certain time frame and at a premium to the current market price, this premium compensates investors for tendering their shares rather than holding on to them.

Meanwhile, in a separate regulatory filing, FDC announced that the company's oral solid dosage facility located in Goa has received a Good Manufacturing Practice (GMP) certificate and it continues with its approved status from PICs - NPRA (National Pharmaceutical Regulatory Agency), Malaysia.