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Shares of Star Cement dipped 6 per cent to Rs 109.40 on the BSE in the intra-day trade after the stock of cement manufacture turned ex-share buyback today. The company has fixed Thursday, August 26, 2021, as the record date for the buyback of equity shares. The stock had hit a 52-week high of Rs 120 on August 16, 2021.
“The board of directors of Star Cement, at its meeting held on August 13, 2021, approved the buyback of not exceeding 8.25 million equity shares, representing up to 2 per cent of total equity capital of the company, for Rs 150 per share. The buyback shall be on a proportionate basis from all the equity shareholders of the company through the tender offer process,” the company said.
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The share buyback is the acquisition of its shares by a company to return surplus cash to the shareholders holding the equity shares. Buyback is a more efficient form of distributing surplus cash to the shareholders holding equity shares of the Company.
The Buyback would help in improving return on equity by a reduction in the equity base, thereby leading to a long-term increase in shareholders’ value. It would help in optimizing the capital structure.
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