Shares of Dr Reddy’s Laboratories climbed 3.52% on Wednesday to close at Rs 2,961.05 on the BSE, as the board of the company approved the proposal to buyback shares from existing investors.
The company will buy shares aggregating up to Rs 1569.4 crore at a maximum price of Rs 3,500 apiece, it said in a filing with the stock exchanges.
The buyback price fixed is about 18% higher than the closing price of DRL on the BSE on Wednesday. The total issue will constitute about 15% of the total paid-up capital and free reserves of the company as on March 31,2015, an official statement said.
Over 8 lakh shares of DRL changed hands across the exchanges during the session, against the three-month average of 6.7 lakh shares.
Wednesday’s rally came as a relief for DRL as the stock has lost nearly 15% since December 2015. Even earnings of the pharma company were below the Street expectations. The Hyderabad-based company reported a marginal 1% increase in its consolidated net profit year-on-year.
London-based investment banking firm HSBC said in a note to investors that the near-term outlook for Dr Reddy’s remains cautious as the company has stopped supplies to Venezuela and expects zero sales from the country in Q4FY16.
“While we like increasing specialty and complexity mix in the product portfolio for the company, emerging markets slowdown, coupled with ongoing slowdown in bulk business and weak US launch visibility, prompts us to revise numbers downwards,” the report said.
Shares of Just Dial, which announced its buyback plans earlier during the week, rallied close to 18.6% on Wednesday. Shares of Just Dial have gained nearly 26% during the current week.
Just Dial buyback would start on February 25, and the last day to tender shares is March 10.
The company plans to buy back close to 10.61 lakh shares, stock exchange filing said. Shares of Just Dial have corrected close to 40% since the beginning of the year. The e-commerce company reported a 16% drop in its net profit for the quarter ended December.