“The board of directors of the Company will also consider a proposal for buy-back of the fully paid-up equity shares of the Company, as well as matters related/incidental thereto, at the said board meeting scheduled to be held on August 9, 2018,” ICRA
said in a BSE
filing on Friday after market hours.
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).
As of June 30, 2018, the promoters held 50.55% stake in ICRA, the shareholding pattern data shows. Insurance companies held 14.33% holding, followed by foreign portfolio investors (10.72%), mutual funds (10.02%), individual shareholders (6.14%) and HDFC Standard Life (1.53%), data shows.
Thus far in the calendar year 2018, ICRA had underperformed the market by falling 13% as compared to 10% rise in the S&P BSE
Sensex till Friday.
At 12:50 PM; the stock was trading 4.5% higher at Rs 3,597 against 0.38% gain in the benchmark index. A combined 3,010 equity shares changed hands on the BSE and NSE