BUYBACK OF SECURITIES

Guided by – Mr. Himal ParikhSubmitted by – Prashant Maharshi

WHAT IS BUYBACK???

• Process by a company to bring their shares

back from the shareholders.

• Where shareholders sell their shares directly to the company.

SEBI GUIDELINES FOR BUYBACK

• It should be authorized by the articles of association of the company.

• The buy back is or less than 25 percent of the total paid up equity share capital and free reserves

• The ratio of debt owned by the company is not more than twice the capital and its free reserves after such buy back.

• All the shares or other specified securities for buy back are fully paid up.

• The amount to be invested under buyback.

WHY BUYBACK IS DONE???

• To return surplus cash to shareholders• To increase the underlying share value• To support the share prices during temporary weakness• To achieve or maintain a target capital structure• To prevent or inhibit unwelcome take-over bids • To increase promoters holdings• To increase earnings per share• In fact the best strategy to maintain the share price in a

bear run is to buy back the shares from the open market at a premium over the prevailing market price.

SOME CASE STUDIES ON

BUYBACK

GEMINI COMMUNICATIONS

• O/s Shares before buyback – 106,898,000 equity shares @ Rs. 1 each.

• O/s Shares to be bought back –

Minimum - 1100000 equity shares.

Maximum - 11000000 equity shares.

• O/s Shares of buyback successful - 6618738 equity shares.

• Record date – 24 September, 2012.

• Buyback opening date – 27 January, 2012.

• Buyback closing date – 30 April, 2012.

• Maximum buyback price – Rs. 45.

• Amount for buyback and offer type – Open market, Rs. 30 cr.

CRISIL Ltd.

• O/s Shares before buyback – 70,968,440 equity shares @Rs. 1 each.

• O/s Shares to be bought back –

Minimum - 240000 equity shares.

Maximum - 800000 equity shares.

• O/s Shares of buyback successful – 910000 equity shares.

• Record date – 25th April, 2012.

• Buyback opening date – 26 December, 2011.

• Buyback closing date – 30 December, 2012.

• Maximum buyback price – Rs. 1000

• Amount for buyback and offer type – Open market , Rs. 80 cr.

ZEE ENTERTAINMENT Ltd.

• O/s Shares before buyback – 958,770,077 equity shares @Rs. 1 each.

• O/s Shares to be bought back –

Minimum - 5,000,000 equity shares.

Maximum - 20,000,000 equity shares.

• O/s Shares of buyback successful – 19,372,853 equity shares.

• Record date – N.A.

• Buyback opening date – Opening – 23 April, 2012

• Buyback closing date – N.A.

• Maximum buyback price – Rs. 140.

• Amount for buyback and offer type – Open market , Rs. 280 cr.

MONNET ISPAT & ENERGY Ltd.

• O/s Shares before buyback – 64,337,807 equity shares.• O/s Shares to be bought back – Minimum - 600,000 equity shares. Maximum - 2,000,000 equity shares.• O/s Shares of buyback successful – 1,286,259 equity shares.• Record date – 21 December, 2012.• Buyback opening date – 21 March, 2012.• Buyback closing date – 21 December, 2012.• Maximum buyback price – Rs. 500.• Amount for buyback and offer type – Open market , Rs. 100 cr.

RELIANCE INDUSTRIES Ltd.

• O/s Shares before buyback – 3,274,722,771 equity shares.• O/s Shares to be bought back – Minimum - 30,000,000 equity shares. Maximum - 120,000,000 equity shares.• O/s Shares of buyback successful – 120,000,000 equity shares.• Record date – 20 January, 2012.• Buyback opening date – 07 February, 2012• Buyback closing date – 19 January, 2012• Maximum buyback price – Rs. 870.• Amount for buyback and offer type – Open market , Rs. 10,440 cr.

RAIN COMMODITIES Ltd.

• O/s Shares before buyback – 354,172,895 equity shares.• O/s Shares to be bought back – Minimum - 6,000,000 equity shares. Maximum - 10,000,000 equity shares.• O/s Shares of buyback successful – 8,536,585 equity shares. • Record date – 03 April, 2012.• Buyback opening date – 14 November, 2011.• Buyback closing date – 30 April, 2012.• Maximum buyback price – Rs. 41.• Amount for buyback and offer type – Open market , Rs. 35 cr.

JK LAKSHMI CEMENT

• O/s Shares before buyback – 122,358,924 equity shares @Rs. 10.• O/s Shares to be bought back – Minimum – N.A. Maximum – N.A.• O/s Shares of buyback successful – 1.39 Crore shares of Rs. 5 each.• Record date – N.A.• Buyback opening date – 26 March, 2012. • Buyback closing date – 6 February, 2012.• Maximum buyback price – Rs. 70.• Amount for buyback and offer type – Open market , Rs. 98 cr.

SASKEN COMMUNICATION TECHNOLOGIES Ltd.

• O/s Shares before buyback – N.A. • O/s Shares to be bought back – Minimum – 1,450,000 equity shares Maximum – 5,800,000 equity shares.• O/s Shares of buyback successful – 4,804,444 equity shares.• Record date – N.A. • Buyback opening date – May 21, 2012.• Buyback closing date – April 22, 2013.• Maximum buyback price – Rs. 180.• Amount for buyback and offer type – Open market , Rs. 8,648 lakhs.

Thank You