GNFC to buy back shares worth ₹653 crore in December

GNFC to buy back shares worth ₹653 crore in December
GNFC to buy back shares worth ₹653 crore in December

by Tanushree Jaiswal Last Updated: Nov 30, 2023 - 04:34 pm 1.2k Views
Listen icon

Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) has unveiled plans for a share buyback, set to kick off on December 1 and conclude on December 7. The company intends to repurchase 84.78 lakh equity shares at a rate of ₹770 each, ensuring that the total amount does not exceed ₹652.81 crore. The buyback, representing 5.46% of GNFC's existing total paid-up equity capital, is set at a premium of 11.9% compared to the closing price on November 29. The record date for buyback was November 24.

GNFC aims to efficiently and cost-effectively give back extra funds to its shareholders through the buyback. As outlined in a regulatory filing, these funds go beyond the company's regular capital needs and current investment plans.

Gujarat State Fertilizers & Chemicals and Gujarat State Investments, the two promoters, currently hold 41.18% of the company. Following the buyback, their aggregate shareholding will increase marginally to 41.3%. Promoters have expressed their intention to actively participate in the buyback, intending to tender around 35 lakh shares.

Financial Highlight

During the second quarter of fiscal year 2024, Gujarat Narmada Valley reported a decline in key financial metrics compared to the same period last year. The company's revenue dropped 19.6%, amounting to ₹2,080 crore as opposed to ₹2,587 crore previously. Ebitda dropped by 45.3% to ₹169 crore from ₹309 crore YoY

The margin took a hit as well, contracting from 11.9% to 8.1%, reflecting a decline of 381 basis points. The net profit for Q2 FY24 stood at ₹182 crore, indicating a decrease of 23.5% compared to ₹238 crore in the corresponding period. These figures highlight a challenging quarter for Gujarat Narmada Valley. The decline in performance is linked to a scheduled yearly maintenance shutdown, leading to reduced production volumes.

Stock Performance

Over the past month, GNFC's shares have remained relatively stable, showing a marginal decrease of 0.84%. Looking at the past six months, the stock has been on an upward trend, delivering a 17% return. Investors who have been on board for a year have gained a 14% return on their investment. Taking a broader view over five years, GNFC has demonstrated impressive growth, delivering a 100% return to its investors.

Final Words

With the buyback, GNFC aims to deploy an effective capital management strategy, providing shareholders with an opportunity to benefit from the premium offered. The company's commitment to returning surplus funds in a well-organized manner reflects its dedication to maximizing shareholder value and maintaining financial prudence. Investors will keenly watch the developments as the buyback unfolds between December 1 and 7.

Share Market Today


How do you rate this article?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

378X91-D3

About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest News
Stocks in News Today

Our analysts at 5paisa scan through the financial markets and select the few trending stocks which were in the news and in the limelight for the day. Here is the list of a few trending stocks with their latest News and Updates.

Paytm Share Price Surge 5% After Discontinuing Inter Company Pacts with PPBL

At 2.25 pm today, shares of One97 Communications the parent company of the renowned Paytm brand surged by 5% reaching ₹423.45.

NTPC Enters JV Agreement with Maharashtra State Power Generation

NTPC Green Energy Limited, a subsidiary of NTPC Limited, has partnered with Maharashtra State Power Generation Company Limited (MAHAGENCO) to lead the development of renewable energy parks in Maharashtra.