After opening on a slightly positive note, the stock touched the days low of Rs 350.30 before taking off to a high of Rs 439.90.
It finally closed the day at Rs 423.95, posting a gain of Rs 55.55 or 15.08% over its previous close.
In a communication to the Bombay Stock Exchange (BSE), DLF said a meeting of the companys board would be held on July 10 to consider and approve the proposal for buy-back of equity shares of the company.
When contacted, a company spokesperson said, Our land bank is fully paid, and we are generating a lot of cash. Through buy-back of equity shares, we want to protect the investors interest.
The share price of DLF had been taking a beating amidst volatile markets, and, significantly, touched its 52-week low of Rs 350 on Wednesday, before moving up smartly. The stock had touched a 52-week high of Rs 1,225 on January 15.
The research head at a leading broking firm said, It is a positive move by the company to protect investors interest in such uncertain times where the sales in the real estate market have slowed down due to higher interest costs. Also, the profit margins of the firms in that space are in doubt due to a rise in input costs (mainly cement and steel). The move reflects that the company is fundamentally safe. In a very high-profile initial public offer, DLF had raised $2.25 billion in July 2007, pricing it at Rs 525 per share.
The company had reportedly shelved plans to raise further capital for its property trust in Singapore due to turbulent market conditions.
Currently, buy-backs seem to be in vogue at the bourses as such programmes of six companies are currently on. The biggest among them is that of Reliance Infrastructure, which intends to buy back its stocks worth Rs 800 crore.
Other firms pursuing such proposals include Great Offshore, ICI, Mastek and SRF.