The stock however outperformed the market, as the benchmark S&P BSE Sensex tanked 9.4 per cent to 29,687 points at 09:22 today. The Nifty50 index hit a 10 per cent lower circuit, bringing trading to a halt for 45 minutes as sell-off worsened in the Indian markets.
“The meeting of board of directors of the Company is scheduled to be held on Tuesday, March 17, 2020, to consider and if deemed fit, to approve, inter alia, the proposal for buy-back of fully paid-up equity shares of the Company, which would include maximum amount, maximum number of equity shares, mode of buy-back and other matters,” Sun Pharma said in exchange filing on Thursday after market hours. Yesterday, the stock slipped 8 per cent to Rs 855 on the BSE.
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 price to earnings (P/E) multiple.
In the past one year, the Sun Pharma's stock price plunged 25 per cent, as compared to 13 per cent decline in the Sensex till Thursday. In the last three years, the stock has tanked 48 per cent against 13 per cent rise in the benchmark index.