KIOCL slumps after board OKs share buyback at Rs 110 per share

KIOCL hit a lower circuit of 10% at Rs 122.70 after the company said its board approved to buyback shares at Rs 110 each.

The board of directors of KIOCL on Monday (19 October) approved a buyback proposal. The board approved a buyback not exceeding 1,41,74,469 shares (representing 2.28% of the total number of fully paid-up equity shares in the paid-up share capital of the company) at Rs 110 each for an aggregate consideration not exceeding Rs 155.92 crore. The buyback will be on a proportionate basis through a tender offer route. The company has fixed 30 October 2020 as the record date for the purpose of ascertaining the eligibility of shareholders for buyback of equity shares.

As of 16 October 2020, the Government of India held 99.06% in KIOCL. The company, a flagship company under the Ministry of Steel, Government of India, was formed on 2 April 1976 for mining and beneficiation of low grade iron ore at Kudremukh in Karnataka. It has over four decades of experience in operating iron ore mining, beneficiation and iron-oxide pelletisation in the country.

KIOCL's net profit fell 27.8% to Rs 12.02 crore on 27.2% decline in net sales to Rs 434.44 crore in Q1 June 2020 over Q1 June 2019.

The scrip has galloped 164.72% from its 52-week low of Rs 46.35 hit on 25 March 2020.

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