Piramal Ent to buy back 14 mn shares for ₹1,750 crore

livemint.com:

₹1,750 crore as part of its strategy to distribute excess capital to its shareholders, the diversified non-bank financier said on Friday. “It is in line with our consistent focus on long-term value creation for stakeholders and effective utilization of capital," said Ajay Piramal, chairman, Piramal Group. This represents 5.87% of the total paid-up equity share capital of the company.The price, at ₹1,250 per share, has been set at a premium of 25% over the closing price on 25 July, when the initial announcement was made on the stock exchanges.

“I would like to say that the promoter and the promoter group shall not participate in the buyback." Over the last 12 months, the company has returned a total of ₹3,278 crore to shareholders, considering both the buyback, and dividends payment, he added. The entire process, he said, is expected to be completed within two months. “The capital allocation strategy aims to combine investing in our core business and returning excess capital to the shareholders." Piramal said the company’s consolidated capital adequacy ratio stood at 34%, higher than the RBI’s requirement of 15%.

“Even after the buyback, capital adequacy ratio will be 31%. Future growth will not require us to raise any additional capital. I think in the next four-five years I do not see any issue." The promoters held 43.48% stake in the company as of 21 July.

While domestic institutions held 13.55%, foreign holding stood at 25.74%. The rest was held by the Indian public, and corporates, among others. Shares of Piramal Enterprises stood at ₹1,072.8 on Friday, down 2.15% of its previous close.