Reliance Industries approves $2.1 bn buyback at Rs 870 per share after Q3 profit slump
The country's most-valued firm Reliance Industries today announced a buyback of shares worth up to Rs 10,440 crore from the public in what would be largest such programme in the history of the Indian capital market.
RIL would buy back up to 12 crore equity shares worth Rs 10,440 crore from the open market at a maximum price of Rs 870 apiece in its first share buyback since 2005.
"The board of directors of RIL at its meeting held today unanimously approved the buyback of up to 12 crore fully paid equity shares at Rs 10 each, at a price not exceeding Rs 870 per equity share, up to an aggregate amount not exceeding Rs 10,440 crore, from the open market through the stock exchanges," the company said in a statement.
Market analysts were, however, disappointed by the size of the buyback, which represented 3.7 per cent of the company's equity capital. RIL had in December, 2004, offered to buyback 10 per cent of its equity at Rs 570 per share.
The analysts said the share buyback -- coming after a gap of about seven years for RIL shareholders -- could be aimed at helping the stock regain its lost glory, given their sharp plunge of 35 per cent last year, as against a fall of about 24 per cent in the market benchmark Sensex.
"It is reasonable to expect that this will be largest-ever buyback programme in the history of the Indian capital market," said SMC Global Securities Strategist & Head of Research Jagannadham Thunuguntla.
"Assuming an about 10 per cent premium, the company may choose the maximum buyback price in the range of Rs 850-900 per share," he added.
The stock has been under-performing the broader market by a wide margin in recent months, but has been on an upward journey in the last couple of trading sessions. In the recent past, it was traded below the Rs 700 level for the first time in the last few years.
News of the buyback from public investors has prompted a 2 per cent rise in the company's stock price since Wednesday.
Late last month, RIL was briefly replaced by Tata Group firm TCS as the country's most valued company, while earlier in December, it was overtaken by IT giant Infosys as the most influential stock on the market barometer Sensex.
However, RIL has managed to regain its pole positions, both in market value and Sensex weight terms.
At the end of today's trade, RIL commanded 10.231 per cent weight on the Sensex, against Infosys' 9.10 per cent. RIL's total market value stood at Rs 2,59,778 crore.
Ashika Stock Brokers' Research Head Paras Bothra said, "Buyback of shares always goes well with the market as it is pro-shareholder in nature. The move is a positive indication from the company management."
"Also, this buyback announcement is a strong statement from the company's management that they 'feel' currently the share price in the market is undervalued than the intrinsic worth," he added.
21 January 2012
Full MFN status to India only after 'negative list' is phased out: Pak
Full MFN status to India only after 'negative list' is phased out: Pakistan
Pakistan Commerce Minister Makhdoom Amin Fahim has said Islamabad could grant "full" Most Favoured Nation (MFN)-status to India only after a "negative list" trade regime between the two countries is phased out.
The two countries are currently moving from a "positive list" regime to a "negative list" regime but even the "negative list" goes against the non-discriminatory trade that MFN status demands, Fahim told a news conference yesterday.
The "positive list" agreed on by the two sides contains over 1,900 items that can be traded between the two sides.
The "negative list" currently being finalised will include the items that cannot be traded, significantly expanding the scope for bilateral trade.
"We are working on the negative list. The items in the list will not be allowed for trade with India," Fahim said.
Even trade with India through a negative list was a violation of the World Trade Organisation rules and until all items are phased out from the negative list, no one can say that full MFN-status has been granted to India, he said.
Fahim's statement cleared the confusion that has persisted about Pakistan's plans to give India MFN-status since Information Minister Firdous Ashiq Awan announced after a cabinet meeting last October that the status had been granted to India.
Asked if trade liberalisation with India was linked to political issues, Fahim said progress in trade negotiations will be in line with developments in other areas of the overall dialogue process launched in 2004.
He said the cabinet had authorised the Commerce Ministry to liberalise trade with India and the regime will initially be switched over from a positive list to a negative list.
"The Commerce Ministry is working with all stakeholders to finalise the negative list by next month," he said.
Commerce Secretary Zafar Mahmood, who too was present at the news conference, said the negative list will be submitted to the cabinet next month for approval.
The cabinet will decide the phase-wise withdrawals of items from the list and the timeline, he said.
Mehmood further said the complete withdrawal of items from the negative list is expected by December this year.
"This is not the final timeline," he clarified.
He noted that India's investment regime was "discriminatory" towards Pakistani investors.
"A Pakistani can't even buy property in India," he said.
Asked if the government is protecting elite industries at the cost of consumers, Fahim said he believed Pakistan's pharmaceutical and automobile firms should compete with Indian products.
However, protection would be provided to these sectors, he said.
Mehmood said though there were no Pakistan-specific non-tariff barriers in India, Islamabad will sign three different agreements with New Delhi to remove hurdles that may come in the way of free trade between the two countries.
These agreements are expected to be signed during Indian Commerce Minister Anand Sharma's visit to Pakistan on February 12.
"We are exchanging drafts of these agreements," he said.
The delegation that will accompany Sharma will visit Karachi, Lahore and Islamabad and meet the business community to exchange views regarding bilateral trade.
India will also hold a three-day trade exhibition in Lahore from February 11.
"We have requested the Prime Minister to allow the display of those items which are not in the positive list as a special case," Mehmood said.
Pakistan Commerce Minister Makhdoom Amin Fahim has said Islamabad could grant "full" Most Favoured Nation (MFN)-status to India only after a "negative list" trade regime between the two countries is phased out.
The two countries are currently moving from a "positive list" regime to a "negative list" regime but even the "negative list" goes against the non-discriminatory trade that MFN status demands, Fahim told a news conference yesterday.
The "positive list" agreed on by the two sides contains over 1,900 items that can be traded between the two sides.
The "negative list" currently being finalised will include the items that cannot be traded, significantly expanding the scope for bilateral trade.
"We are working on the negative list. The items in the list will not be allowed for trade with India," Fahim said.
Even trade with India through a negative list was a violation of the World Trade Organisation rules and until all items are phased out from the negative list, no one can say that full MFN-status has been granted to India, he said.
Fahim's statement cleared the confusion that has persisted about Pakistan's plans to give India MFN-status since Information Minister Firdous Ashiq Awan announced after a cabinet meeting last October that the status had been granted to India.
Asked if trade liberalisation with India was linked to political issues, Fahim said progress in trade negotiations will be in line with developments in other areas of the overall dialogue process launched in 2004.
He said the cabinet had authorised the Commerce Ministry to liberalise trade with India and the regime will initially be switched over from a positive list to a negative list.
"The Commerce Ministry is working with all stakeholders to finalise the negative list by next month," he said.
Commerce Secretary Zafar Mahmood, who too was present at the news conference, said the negative list will be submitted to the cabinet next month for approval.
The cabinet will decide the phase-wise withdrawals of items from the list and the timeline, he said.
Mehmood further said the complete withdrawal of items from the negative list is expected by December this year.
"This is not the final timeline," he clarified.
He noted that India's investment regime was "discriminatory" towards Pakistani investors.
"A Pakistani can't even buy property in India," he said.
Asked if the government is protecting elite industries at the cost of consumers, Fahim said he believed Pakistan's pharmaceutical and automobile firms should compete with Indian products.
However, protection would be provided to these sectors, he said.
Mehmood said though there were no Pakistan-specific non-tariff barriers in India, Islamabad will sign three different agreements with New Delhi to remove hurdles that may come in the way of free trade between the two countries.
These agreements are expected to be signed during Indian Commerce Minister Anand Sharma's visit to Pakistan on February 12.
"We are exchanging drafts of these agreements," he said.
The delegation that will accompany Sharma will visit Karachi, Lahore and Islamabad and meet the business community to exchange views regarding bilateral trade.
India will also hold a three-day trade exhibition in Lahore from February 11.
"We have requested the Prime Minister to allow the display of those items which are not in the positive list as a special case," Mehmood said.
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