Welspun Enterprises falls 4.7% at intra-day on share buyback plan

Extending losses for the third straight session, Welspun Enterprises was trading 4.7% lower at Rs 58.55% at intra-day trade on BSE in an otherwise range-bound market.  The company fell a day after it announced plans to buy back up to 25% of its share capital at Rs 62 per equity share.
 
“With a view of utilising the company’s substantial cash reserves and in order to enhance shareholder value, the board has approved buy back of 25% of the company’s share capital,” the company said in a filing to BSE. However, the Rs227 crore buyback would be subject to shareholders’ approval.

 
The buyback would be at a price of Rs62 per equity share in cash for an aggregate consideration not exceeding Rs2.7 billion.
 

The promoter group, except the foreign co-promoters holding 2.17%, have indicated their intention to participate in the proposed buyback, the filing said.
 
Promoters hold a total 37.35% stake in the company. Public shareholders have 54.72% holding in the firm.
 
At 09:58 am, shares of Welspun Enterprises were trading 3.58% lower at Rs 59.25. They hit a low of Rs 58.55 and a high of Rs 60.50 during early-morning trade.
 
Commenting on the buyback, Welspun Group chairman BK Goenka said, “We are constantly trying to enhance shareholder value and the proposed buyback is another step in that direction. Welspun Enterprises, with its strong balance sheet, is operating in the sun-rise infrastructure industry and thus we expect to see a lot of initiatives in the coming days.”