Jagran Prakashan surges 11% on share buyback proposal

Jagran Prakashan hit a multi-year low of Rs 46.30 in the intra-day trade on November 19. In the past six months, it has underperformed the market by falling 48%, as compared to a 3% rise in the Sensex

Shares of Jagran Prakashan rallied 11 per cent to Rs 61 on the BSE on Monday after the company announced buyback plan.

“The board of directors of the publishing company is scheduled to meet on Monday, December 09, 2019,  to consider a proposal for buy-back of the fully paid-up equity shares of the company,” Jagran Prakashan. READ FILING HERE

At 10:26 am, the stock was trading 8 per cent higher at Rs 59.45 on the BSE, as compared to a 0.10 per cent rise in the Sensex. A combined 663,553 shares have changed hands on the counter on the NSE and BSE so far.

The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing its supply, which essentially pushes up the share price through a better price to earnings (P/E) multiple.

The stock of Jagran Prakashan hit a multi-year low of Rs 46.30 in the intra-day trade on November 19. In the past six months, it has underperformed the market by falling 48 per cent, as compared to a 3 per cent rise in the benchmark S&P BSE Sensex.

For July-September quarter (Q2FY20), the company reported weak operational performance with consolidated operating profit declining 10 per cent year-on-year at Rs 90 crore. Operating revenues, too, slipped 7 per cent at Rs 515 crore over the previous year quarter.

The management had said that given the disappointing festive season, we should not expect recovery soon but remain committed to deliver the best under the circumstances and distribute the surplus cash, it added.

As of September 2019, the promoters held 61.60 per cent stake in Jagran Prakashan. Institutional investors led by mutual funds held a combined 28.84 per cent stake, while individual shareholders held 6.2 per cent stake in the company, shareholding pattern data shows.