Shares of Godawari Power & Ispat rose more than 1% after the company’s board on March 18 approved a share buyback programme of Rs 250 crore via the tender offer route.
Shares of the company were up 0.7% at Rs 391 on the BSE at 9:17 am. The stock rose from Rs 341.65 on February 27 to a high of Rs 393.35 today.
The company’s shares are up 4% year-to-date, but over the past three years, shares gained nearly 1,300%.
The company informed the stock exchange that the board has agreed to buy back 5 million shares of Rs 5 each, representing 3.66% of the total share capital.
The buyback price has been fixed at “Rs 500 per share”, more than 22% higher than the last close.
According to the regulatory filing, the total amount used for share buybacks is Rs 2.5 billion, representing 8.14% of the total paid-up share capital and 7.67% of the company’s free reserves.
Godawari Power said the planned buyback is within the statutory limit of 10% of the company’s total paid-up share capital and free reserves.
Godawari Power is a fully backward integrated steel company with a significant presence in the entire value chain, from operating captive iron ore mines to manufacturing and selling value-added steel products. The company is one of the largest pellet manufacturers in India and the only premium pellet manufacturer in India. In addition to pellets, the company also produces sponge iron, long steel products, ferroalloys and green energy.
In Q3FY23, the company’s consolidated revenue fell 9% YoY to Rs 1,463 crore, and EBITDA decreased 65% to Rs 173.1 crore, mainly due to lower realisations. Profit after tax also fell by around 68% to Rs 127.98 crore in the December quarter, mainly due to lower realisation.