Godawari Power & Ispat has approved a buyback of equity shares worth Rs 250 crore at its board meeting held on Saturday. The company will buyback up to 50 lakh equity shares of face value of Rs 5 each through this exercise.
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The buyback price has been set at Rs 500 per share, which is a 28.2 percent premium to Friday's closing price.
Size of the buyback represents 3.66 percent of the total number of equity shares in the paid-up equity share capital of the company.
The buyback will be done through the tender offer route and the record date for the same has been set as March 31, 2023.
In an interaction with CNBC-TV18 on March 20, Godawari Power Executive Director Abhishek Agrawal, “The buyback is through the tender route and all shareholders of the company including promoters are eligible to participate and promoters have given their indication that they will participate into the buyback.”
He added, “On pricing front Godawari Power has been trending in the range of say about Rs 250 to about Rs 497 for last one year, the highest it is traded at Rs 497. So, we thought that the highest price stocks traded in recent past should be the basis wherein many retail shareholders would have entered the stock so, they will get an exit and there will be a reservation for 15 percent of the buyback for the retail shareholders.”
A tender offer buyback means that shareholders have to tender a portion or all of their shares within a certain time frame and at a specific price. On the other hand, an open market buyback means a company buys back shares through the open market over an extended period of time.
The company has also appointed a buyback committee to oversee the entire exercise. The committee will include Managing Director Bajrang Lal Agrawal, two executive directors, one independent and non-executive director each.
In an interaction with CNBC-TV18 on February 14, Godawari Power Executive Director Abhishek Agrawal said that pellet prices in the March quarter are seen higher by 20 percent on a sequential basis and that the company is likely to restart exports by the JUne quarter of financial year 2024.
Agrawal further said that the opening up of China will aid demand for pellets and that the company's EBITDA margin will be in the range of 18-20 percent.
Shares of Godawari Power are down 1.6 percent so far this year. The stock ended 4 percent higher on Friday.
