The board of public sector Coal India Ltd on Monday approved a proposal to buy back 1.72 per cent of its equity shares with the public at a price of Rs335 per share, for an aggregate amount of Rs3,650 crore.
A maximum of 108.9 million shares of the company, from all the shareholders holding equity shares of the company as on record date, will be bought back on a proportionate basis through the tender offer route.
The buyback price will not exceed 25 per cent of the aggregate fully-paid up share capital and free reserves of the company as per audited accounts of the company for the financial year ended 31 March 2016.
The large-cap company has equity capital of Rs6,316.36 crore and the face value of share is Rs10.
The board, at a marathon seven-hour meeting in New Delhi, decided that the buyback would be funded out of CIL's cash reserves.
Coal India stock dived 1.93 per cent to Rs314.30 at 9:24 on BSE following the news.
The announcement was made after market hours on Monday, 11 July 2016.
About 1.24 lakh shares of CIL were traded in BSE, against the average daily volume of 3.73 lakh shares in the past two weeks.
The stock hit a high of Rs322 and a low of Rs313.50 in early trading. The stock had hit a 52-week low of Rs 272.05 on 12 April 2016. The stock had hit a record high of Rs447.25 on 5 August 2015.
For the quarter ended 31 March 2015-16 (Q4 2015-16) Coal India reported a 0,2 per cent increase in its consolidated net profit to Rs4247.93 crore while net sales declined 0.1 per cent to Rs20759.45 crore during the quarter.