Stock Market: SIS, a security solutions and cash logistics services company, has given in-principle approval to its shareholders for a buyback proposal worth up to Rs 120 crore. This will be the company’s fifth buyback since its listing in August 2017.
Number depends on actual tender price
The company has fixed the maximum price for buyback at Rs 478.50 per share. On Tuesday, the company’s shares closed 4.76% lower at Rs 415.55, meaning the proposed buyback price is about 15% higher than the current market price. According to estimates, under this buyback the company can buy back up to 25 lakh shares, although the final number will depend on the actual tender price.
SIS Char Buyback and Dividend
After adding this new proposal, the total amount returned by the company to shareholders through buyback and dividend can reach around Rs 720 crore. Before this, SIS has already returned about Rs 600 crore to investors through four buybacks and dividend.
About 86 lakh shares were repurchased in the last four buybacks of the company. After the new proposal, this figure may increase to more than 1.11 crore shares.
Improvement in return on capital
Group Managing Director Rituraj Kishore Sinha said that the company is continuously working on options to deliver the surplus capital to the shareholders. He believes that this buyback will also help in improving earnings per share and return on capital.
Approvals and Regulatory Approvals
The final process, timeline and terms of the buyback will be decided as per SEBI regulations after board, shareholders’ approval and regulatory approvals.
Disclaimer: This analysis is based on expert opinion. Consult your financial advisor before investing, as the stock market can be risky.
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