UPL Ltd. (earlier known as United Phosphorus Ltd.) has announced a buy-back of up to 1.40 crore fully paid equity shares of Rs.2 each at a price not exceeding Rs.220 per share payable in cash, up to an aggregate amount not exceeding Rs.308 crore from the public and institutional investors.
The offer price is at a premium of around 14 per cent to Friday’s closing price of Rs.193.25. The promoters of UPL, the Shroff family and associates, have a 28.8 per cent stake in UPL. Institutional investors have around 20 per cent.
On the Bombay Stock Exchange (BSE), the UPL share scaled a 52-week high of Rs.198.4 before closing at Rs.196.45 on Monday.
According to the filing, the Chairman of the company informed the board that present market value of equity shares did not reflect its true valuation. One of the ways to get true valuation would be to buy back shares from the market.
The company had sufficient financial resources. These resources could be gainfully employed in buying back of shares to increase shareholder value, it said.
“The buy-back will result in reduction of number of shares accompanied by possible increase in earnings per share and return on capital,” it added.