A small-cap real estate stock jumped more than 15 percent on Thursday’s early trades after the company announced a buyback of its shares. The existing shareholders of the company as on the record date of July 28, 2023, will be eligible for the buyback.
According to an exchange filing, Ashiana Housing Ltd will buy back a maximum of 18,27,242 (approximately 18.27 lakh) equity shares of the face value of ₹ 2 each at a price of ₹ 301.00. This indicates that the company is offering a premium of 52 percent as compared to its closing share price of ₹ 198.20 apiece on Wednesday. It added that the aggregate amount of this buyback shall not exceed ₹ 55 crores.
The company’s shares opened at ₹ 228.00 apiece, which is also its intraday high. At 01:12 PM on Thursday, its shares were trading 8.65 percent higher at ₹ 215.35 apiece.
Ashiana Housing is a real estate development company. Its projects include comfort homes projects, senior-living projects and kid-centric homes projects.
With a market capitalization of ₹ 2,029 crores, Ashiana Housing is a small-cap company. It has a low return on equity of 3.73 percent and an ideal debt-to-equity ratio of 0.24. Its shares were trading at a price-to-earnings ratio (P/E) of 71.47, which is significantly higher than the industry P/E of 31.5, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 61.22 percent stake in it followed by retail investors with 22.80 percent, Mutual funds with 8.40 percent and foreign institutions with 7.58 percent.
Written by Simran Bafna
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