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Written by Rasesh Tanna
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Thursday, 06 March 2008 |
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Reliance energy is on track to buy back its shares at a maximum rate of Rs. 1600/share. As per the board meet which took place yesterday (Wednesday, evening) the board has decided to buyback the shares at a 9.6% premium to todays closing price.
REL plans to buyback shares worth approximately 2,000 crores. So according to their purchase price they will be able to buy about 1.5% from the open market. This will raise the promoter stake to 37%.
The company has over 10,000 crores in cash reserves in the bank and is of the thought that the company is currently grossly undervalued. This buyback will increase the overall EPS of the company since the buyback shares will be extinguished.
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