28 companies announce buyback plans aggregating Rs 213 billion


New Delhi, Jun 21: The first six months of calendar year 2018 (CY18) has seen 28 companies announce buyback plans aggregating Rs 213 billion with Tata Consultancy Services (TCS), Kaveri Seed Company and Jagran Prakashan planning a buyback of their shares for the second consecutive year.
Besides these three, 11 companies – Aarti Drugs, Balrampur Chini Mills, Bharat Electronics, eClerx Services, Indiabulls Real Estate, KPR Mill and MOIL – have approved share buyback proposal in two out of the last three years.
While Mcleod Russel, ADF Foods, Indiabulls Real Estate, DCM Shriram and BSE have announced buyback through open market route, the remaining 23 companies plan to buy back their shares via the tender offer route.
Except TCS that has decided to go ahead with a share buyback programme in a move to return excess cash to its shareholders, some companies have taken the buyback route to restrict the fall in their stock prices since beginning of CY18, analysts say.
“Information technology companies are cash rich and it makes sense for them to reward shareholders via buybacks. A lot of the other companies announcing such plans are from the mid-and small-cap segments that have been beaten down badly. A buyback gives them a route to help arrest the fall in their stock price,” says G Chokkalingam, founder and managing director at Equinomics Research.