Dr Reddy’s Laboratories has rallied 6.5% to Rs 3,154, extending its previous day’s 3.6% gain on the National Stock Exchange (NSE), after the company said it will buyback around 4.49 million shares representing 2.6% of the existing paid up capital of the company, at a price not more than Rs 3,500 per share under the open market route.
The company's board has approved a proposal to buyback shares, subject to the approval of shareholders, for an aggregate of amount not exceeding Rs 1,569 crore, Dr Reddy's Laboratories said in a regulatory filing.
The drug maker said that the buyback is proposed on account of the Company’s strong cash flow position and is expected to be earning per share (EPS) accretive contributing to an overall enhancement of value of shareholders going forward.
"Based on the minimum buyback size and the maximum buyback price the company will purchase a minimum of 2.24 million shares," it added.
The company has appointed Kotak Mahindra Capital Company as its merchant banker for the buyback process.
At 11:36 AM, the stock was up 5.3% at Rs 3,118 on the NSE. A combined 705,373 shares changed hands on the counter on the NSE and BSE.