Shares of specialty chemicals manufacturer Atul Ltd. declined on Tuesday, November 7, after the company's board approved a buyback of equity shares.

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The company will buyback shares worth up to ₹50 crore at a price not exceeding ₹7,500 apiece.

Atul will conduct the buyback through the open market route, which means that there will be no fixed price at which the shares will be repurchased. The company plans to buyback up to 66,666 equity shares from existing shareholders.

You can read more about share buybacks here.

Even if one takes the maximum buyback price of ₹7,500 apiece, it is only a 11% premium from Monday's closing price. The stock had risen 9% in the last three sessions in anticipation of the buyback announcement.

The indicative maximum shares that are planned on being repurchased under the buyback plan amount to 0.23% of the total number of outstanding equity of the company. "The actual number of equity shares bought back during the buyback will depend upon the actual price, including the transaction costs and other factors," the company said.

Atul's board has also constituted a committee for the purpose of the buyback. In case all the planned 66,666 shares are repurchased from the Open Market, the promoter holding in the company will increase to 45.16% from 45.06% currently.

Shares of Atul have given up all the gains of the day, currently trading 3.5% lower at ₹6,497. The stock is down 20% so far in 2023.

First Published:Nov 7, 2023 11:16 AM IST