Selan Exploration surges 16% as board approves share buyback proposal

The stock moved higher by 16% to Rs 201 on BSE on Thursday after the board approved buyback of equity shares at a price not exceeding Rs 300 per share.

Shares of Selan Exploration Technology moved higher by 16% to Rs 201 on BSE on Thursday after the board approved buyback of equity shares at a price not exceeding Rs 300 per share.

The company said the buyback will be for an aggregate amount of Rs 250 million from the open market through stock exchange mechanism.

The board of directors of the company has also declared an interim dividend of 50% (i.e. Rs. 5 per equity share) for the financial year 2018-19. The record date for the purpose of the interim dividend has been fixed as January 5, 2018.

In the past three trading days, the stock rallied 23% from Rs 164 level after the company announced that its board will meet on December 27, to consider buyback of the equity shares and interim dividend.

The primary objective of 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.

Thus far in the calendar year 2018, the stock had underperformed the market by falling 29%, as compared to a 5% rise in the S&P BSE Sensex till Friday.

At 02:13 pm, Selan Exploration was trading 12% higher at Rs 195, against 0.8% gain in the benchmark index. The trading volumes on the counter jumped an over 15-fold with a combined 2.83 million equity shares changed hands on the BSE and NSE so far.