Akzo Nobel India has rallied 6% to Rs 1,911 on the BSE in intra-day trade on Wednesday after the company said its board of directors are scheduled to meet on Friday, April 06, 2018, to consider proposal to buy-back its own shares.
The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple. The other objective is to improve earnings per share (since the same dividend amount is now distributed among fewer shares).
In past one year, Akzo Nobel India had underperformed the market by falling 8% as compared to 12% rise in the S&P BSE Sensex till Tuesday.
The company earlier this week informed the stock exchanges that divestment of the Company's specialty chemicals business to Akzo Nobel Chemicals India Private Limited has been completed with effect from close of business on 31 March 2018.
At 09:37 am; the stock was trading 4.5% higher at Rs 1,882 against 0.15% gain in the benchmark index. A combined 19,759 shares changed hands on the counter on the BSE and NSE so far.