Investors of at least a dozen companies finally have some reasons to cheer. They could sell their stocks even in this tanked market and net a cool profit over the current market value of their investments. Yes, we are talking about the buyback offers, which used to evince lukewarm response from retail investors. Such offers have turned tempting now, thanks to the current market meltdown hitting the valuations of stocks very badly.
According to analysts, most buyback offers in the past did not sail through as the offer prices were not attractive to investors and being substantially lower compared to the then ruling market prices. They even see most of the offers being subscribed fully as investors head for the exit route lured by the high offer price compared to the current value of their stocks.
Alex K Mathew, head analyst, Geojit Financial Services Ltd, said, ?The buyback offers which are currently open may get an overwhelming response from retail investors, as the offer prices are much higher than the current market prices. It provides a good exit route for retail investors in this market.?
According to information gathered by FE, the offer price for buyback of shares quoted by more than a dozen companies are way ahead of the ruling market prices tempting the investors to tender their shares and pocket a cool profit. For instance, ANG Auto is offering to buyback 75 lakh shares at a maximum price of Rs 215 per share while the closing price of the stock on NSE on Wednesday was Rs 38.50.
Similarly, Gateway Distripacks is offering to buyback its shares at Rs 110 per share while the stock is currently trading at Rs 75.50. Goldiam International which had hit the market withits buyback offer at a maximum price of Rs 85 per share in May is currently trading at Rs 30, a huge discount of Rs 55. The offer is open till December 31, 2008.
Other live buyback offers of the companies include Reliance Infrastructure at a maximum price of Rs 1,600 a share against its closing price of Rs 555.45 on NSE on Thursday, Gujarat Flourochemicals at Rs 300 per share against the current price of Rs 98 a share, HEG Ltd Rs 350 (Rs 149.4), Patni Computers Rs 325 (Rs 163), Rain Commodities 307 (Rs 150), Sasken Communications Rs 250 (Rs 98.5), SRF Ltd Rs 160 (Rs 91.3) among others. A few other companies including real estate giant DLF, ICI India and Valiant Communications are also planning to come out with buyback offers.