Dr Reddy's stock up 4% on buyback plan

Shares of drug major Dr Reddy's rose by nearly 4 per cent today as the company will buyback around 44.85 lakh shares, accounting for about 2.6 per cent of the existing paid up capital, for up to Rs 1,569 crore.

The stock gained 3.52 per cent to end at Rs 2,961.05 on BSE. Intra-day, it went up by 4.52 per cent to Rs 2,989.85.

On NSE, shares of the company climbed 3.67 per cent to close at Rs 2,960.70.

The company added Rs 1,723.78 crore to Rs 50,517.78 crore in market valuation.

The company's board has approved a proposal to buyback shares, subject to the approval of shareholders, for an aggregate amount not exceeding Rs 1,569.4 crore at a price not more than Rs 3,500 per share under the open market route, Dr Reddy's Laboratories said in a regulatory filing.
 

"The buyback is proposed on the account of the company's strong cash flow position and is expected to be EPS accretive contributing to an overall enhancement of value for shareholders going forward," it added.

The maximum buyback price represents 18.6 per cent premium, compared to the average of the weekly high and low of the closing price of the company during the last two weeks, it said.