The board of Just Dial on Friday approved the proposed buyback of shares from all shareholders on a proportionate basis through a tender route, the company said in a stock exchange announcement.
The Mumbai-based internet search company has capped the maximum buyback price at R1,550 apiece and will buyback up to 25% of the paid-up capital. The process will take around 3-4 months to complete.
In a television interview, Just Dial’s chief finance officer R Krishnamachari said the company has shelved its plans to raise R1,000 crore for future acquisitions and instead will spend about R170 crore on acquiring shares from the public. The company intends to buy about 12 lakh shares.
“We realised that the valuation levels were so stretched there is no point doing any acquisition at this point of time,” Krishnamachari said in an interview with CNBC-TV18, adding that investing cash into buyback was the most optimal solution.
Just Dial shares rose nearly 9% in morning trade on Friday but gave up gains to end at R1,111.70, up R2 or 0.18% from the previous close. Trading volume surged 2-3 times given the buyback buzz. More than 20.32 lakh shares exchanged hands on BSE and NSE compared with 5-day average trading volume of 6.11 lakh shares and 30-day average volume of 7.44 lakh shares, stock exchange data showed.
Just Dial listed its shares on the stock exchanges in June 2013. VSS Mani and existing investor had sold 1.75 crore shares in a R950-crore IPO. The issue was subscribed 12 times.
Change of plan
The internet search company has capped the maximum buyback price at R1,550 apiece and will buyback up to 25% of the paid-up capital.
The process will take around 3-4 months to complete.
The company has shelved its plans to raise Rs 1,000 crore for future acquisitions and instead will spend about R170 crore on acquiring shares from the public.
The company intends to buy about 12 lakh shares.
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