Triveni Turbine, a mid-cap company that manufactures and supplies power-generating equipment and solutions has announced a ₹ 190 crore buyback.
Buybacks are tax-efficient ways to return money to shareholders. Companies buy their own shares to improve their ratios or if they believe that the markets have discounted their shares deeply.
The company’s board in a meeting held on November 02, 2022, has approved the proposal for a ₹ 190 crore-share buyback through the tender offer route. The shares have a face value of ₹ 1 each and the buyback price has been fixed at ₹ 350 per share. The record date for the same will be fixed subsequently.
The company will buy back up to 54,28,571 equity shares, representing 1.68 per cent of the fully-paid up equity share capital of the company. The buyback offer size represents 24.79 per cent and 22.86 per cent of the aggregate of the company’s fully paid-up equity capital and free reserves as per the standalone and consolidated audited financial statements of the company.
Triveni Turbine’s shares were trading at ₹ 284.20 at 11:20 AM on Friday and the buyback price is ₹ 350 per share, which is at a premium of 23.15%. This buyback is subject to shareholder approval and other regulatory approvals.
Triveni Turbines has given multibagger returns since the onset of the pandemic. Its share price has risen by 463.07% since March 2020. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares at that time, the value of their holdings would be ₹ 5.63 lakhs today!
Triveni Turbines has a market capitalization of ₹ 9,099 crores and an excellent return on equity of 36.17% It is trading at a price-to-equity ratio of 32.67, which is slightly below the industry PE of 37.98, indicating that the stock might be undervalued.
Written by Simran Bafna
