Reliance Energy to decide buyback on March (The Hindu Business Line 26th Feb 2008)Reliance Energy Ltd said on Tuesday that the company’s board would consider buyback of shares at a meeting to be held on March 5.
A company official said that the company was having cash reserves of over Rs 10,000 crore and the stock was undervalued and, therefore, it was decided to take the ‘buyback’ route. It could invest between Rs 1,000 crore and Rs 2,500 crore, he said.
An analyst on condition of anonymity said that the reason for the company to opt for a buyback was ‘illogical and beyond comprehension’. Today the company is opting for a buyback, but in December 2007, the company had opted for Rs 8,000-crore equity capital infusion through a preferential offer.
There is incongruity in these two actions, the analyst said.
Reliance Energy Ltd, in a December 3 notice to the BSE, had said that company was opting for capital infusion so as to participate in large-scale infrastructure projects, which will be soon open for bidding.
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A company official said that the company was having cash reserves of over Rs 10,000 crore and the stock was undervalued and, therefore, it was decided to take the ‘buyback’ route. It could invest between Rs 1,000 crore and Rs 2,500 crore, he said.
An analyst on condition of anonymity said that the reason for the company to opt for a buyback was ‘illogical and beyond comprehension’. Today the company is opting for a buyback, but in December 2007, the company had opted for Rs 8,000-crore equity capital infusion through a preferential offer.
There is incongruity in these two actions, the analyst said.
Reliance Energy Ltd, in a December 3 notice to the BSE, had said that company was opting for capital infusion so as to participate in large-scale infrastructure projects, which will be soon open for bidding.
More
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