Share Buyback News: Anand Rathi Wealth announces share buyback at 13% premium over market price

Anand Rathi Share Buyback News: Brokerage Anand Rathi Wealth's board on Friday gave the nod to a proposal to buy back up to 3.7 lakh of its shares, representing 0.88 per cent of the company's equity, at Rs 4,450 per equity share of the face value of Rs 5 apiece through the tender route.   

The price for the buyback, amounting to Rs 164.7 crore, implies a 13.4 per cent premium to the market price. 

The board also approved the company's financial results for the quarter ended year ended March 31, 2024, and approved a final dividend of Rs 9 per share for the financial year 2023-24. 

Its consolidated net profit jumped 32.8 per cent on a year-on-year basis to Rs 56.6 crore for the fourth and final quarter of FY24, while revenue expanded 34 per cent to Rs 197.2 crore, according to a regulatory filing. 

Meanwhile, the Anand Rathi Wealth board also approved the company's financial results for the quarter as well as year ended March 31, and a final dividend of Rs 9 per share for the financial year 2023-24.

Anand Rathi Wealth registered a 32.8 per cent year-on-year jump in consolidated net profit to Rs 56.6 crore for the fourth and final quarter of the financial year 2023-24, and 34 per cent growth in consolidated revenue to Rs 197.2 crore, according to a regulatory filing. Read more on Anand Rathi Wealth Q4 results

Earlier in the day, Anand Rathi Wealth shares ended stronger by Rs 104.8, or 2.7 per cent, at Rs 4,014.1 apiece on BSE, shrugging off market-wide weakness on Dalal Street.

What is a share buyback?

Share buybacks have become a common practice among companies looking to enhance shareholder value and optimise capital structure. But what exactly is a share buyback exactly? A share buyback—also known as a stock repurchase—is when a company purchases its own outstanding shares from the open market. Companies do this for a number of reasons.

A buyback of shares leads to a reduction in the number of outstanding shares in the market, thereby typically increasing the ownership stake of existing shareholders.

What does it mean when a company buys back its shares through the tender route?

The tender route for share buybacks involves the company making a public offer to its shareholders to buy back a specific number of shares at a predetermined price within a specified timeframe. Shareholders have the option to tender their shares at the specified price or choose to retain them.

Share buybacks—especially through the tender route—can be a strategic tool for companies to deploy excess cash, enhance shareholder value, and signal confidence in their own stock.

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