“The meeting of the board of directors of the Company is scheduled on 20/08/2018, to consider and approve a proposal of buy back of the fully paid up equity shares of the Company including matters related/incidental thereto,” Navneet Education said in a regulatory filing.
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 P/E multiple. The other objective is to improve earnings per share (since the same dividend amount is now distributed among fewer shares).
As of June 2018, the promoters held 61.78% stake in Navneet Education. The domestic mutual funds held 16.13% holding, followed by individual shareholders (12.26%) and foreign portfolio investors (6.32%), shareholding pattern data shows.
Thus far in the calendar year 2018, the market price of Navneet Education had underperformed the market by falling 28% as compared to 11% rise in the S&P BSE Sensex till Monday.
At 10:58 am; the stock was trading 5.4% higher at Rs 125 against 0.41% rise in the benchmark index. The trading volumes on the counter more than doubled with a combined 490,000 equity shares changed hands on the BSE and NSE so far.