Tata Investment Corporation surges 18% as board mulls share buyback
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.
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Shares of Tata Investment Corporation surged 18 per cent to Rs 828 on BSE in the intra-day trade on Wednesday after the company said it's board will consider share buyback proposal at its meeting to be held on Friday, November 16, 2018.
“The board of directors will consider proposal for buyback of equity shares of the Company, at its meeting to be held on Friday, November 16, 2018,” Tata Investment Corporation, a Tata Group company 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.
Thus far in the calendar year 2018, Tata Investment Corporation has underperformed the market by falling 21 per cent, as compared to 3 per cent rise in the S&P BSE Sensex till Tuesday. In the past three years, it has climbed 27 per cent against 37 per cent gain in the benchmark index.
Tata Sons held 68.14 per cent stake in Tata Investment Corporation, as of September 30, 2018. The public shareholders have 27.02 per cent stake, of which 18.69 per cent with individual shareholders and 3.91 per cent with institutional investors, the shareholding pattern data shows.
At 11:57 am, the stock was trading 15 per cent higher at Rs 805, as compared to 0.22 per cent rise in the Sensex. A combined 480,220 equity shares changed hands so far, against an average sub 100,000 shares traded daily in last two weeks on the BSE and NSE.
“The board of directors will consider proposal for buyback of equity shares of the Company, at its meeting to be held on Friday, November 16, 2018,” Tata Investment Corporation, a Tata Group company 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.
Thus far in the calendar year 2018, Tata Investment Corporation has underperformed the market by falling 21 per cent, as compared to 3 per cent rise in the S&P BSE Sensex till Tuesday. In the past three years, it has climbed 27 per cent against 37 per cent gain in the benchmark index.
Tata Sons held 68.14 per cent stake in Tata Investment Corporation, as of September 30, 2018. The public shareholders have 27.02 per cent stake, of which 18.69 per cent with individual shareholders and 3.91 per cent with institutional investors, the shareholding pattern data shows.
At 11:57 am, the stock was trading 15 per cent higher at Rs 805, as compared to 0.22 per cent rise in the Sensex. A combined 480,220 equity shares changed hands so far, against an average sub 100,000 shares traded daily in last two weeks on the BSE and NSE.