Reliance to kick off Rs10,440-crore share buyback on 1 February

Reliance Industries will open its Rs10,440 crore year-long mega share buyback on 1 February and close the offer on 19 January next year, the company said in a newspaper advertisement today.

Reliance Industries, which runs India's biggest single refinery and petrochemical complexes, had last week announced plans to buy back up to 120 million shares in a bid to boost its sagging market capitalisation, which even caused the company, at least briefly, being overtaken by software majors TCS and Infosys Technonologies, respectively, as the market leader.

The board of directors of Reliance Industries Limited (RIL) had, at its meeting on 20 January 2012, unanimously approved the buyback of up to 120 million fully paid-up equity shares of Rs10 each, at a price not exceeding Rs870 per equity share.

The maximum buyback price represents a nearly 10-per cent premium over the last closing price of Rs792.65 on 20 January 2012. RIL shares are currently underperforming.

RIL said it would make cash payments of up to an aggregate amount not exceeding Rs10,440 crore for shares bought from the open market through Stock Exchange(s).

The offer for 120 million shares aggregates to 3.7 per cent of the company's outstanding equity. The controlling shareholders of RIL, who own 44.7 per cent of the equity, will, however, not participate in the offer.

In the stock market, the RIL scrip was trading at Rs783.15 (up Rs12.15) in evening trade today, down from the day's high of Rs785.45. The scrip had fallen 2.7 per cent on Monday after the energy major reported the first fall in its quarterly profit in more than two years.