Jindal Steel & Power Ltd (JSPL) on Friday said it will buy back 8.7 per cent of its paid up capital, amounting to not more than Rs 1,000 crore and the offer will be launched within next 14 days.
The company Board in its meeting today fixed a price of Rs 261 per share for the buyback offer from the open market through stock exchanges, JSPL said in a filing to the BSE.
Talking to PTI, company's Chief Financial Officer K Rajagopal said that through the buy back offer, JSPL wants to give a signal to its investors that company's fundamentals are strong and it is on track to achieve its growth plans.
"We wanted to give signal to the investor community that management believes on the growth plans and fundamentals (of the company). Then there is financial objective, any investment which we make on our shares at such a low value, we ourselves will gain. We believe our shares will grow in next one or two years, when we realise all our growth plans," he said.
He added that buy back offer is likely to be launched on September 12 but a final decision on the date is yet to be taken.
"It should start on September 12 but that date is yet to be fixed. It should start within 14 days of Board meeting and public announcement together," he said, adding that the plan to buy back shares up to Rs 1,000 crore is equivalent to 8.7 per cent of company's net worth (or paid up capital).
Reacting to the buy back offer price of Rs 261 per share, JSPL's shares tumbled on the bourses by upto 12.3 per cent as market participants termed the price lower than expected. The company's shares closed 8.85 per cent down at Rs 221.9 apiece on the BSE.
Rajagopal, however, defended the offer price of Rs 261 per share, saying it is 10 per cent premium to last two weeks average trading price.
"Even two days back when we informed the stock exchanges that Board will consider the share