Gujarat Apollo Industries Ltd Board approves Buy Back of Equity Shares for Rs. 222 per share

The board of directors of Gujarat Apollo Industries Ltd ("Board" / "Board of Directors") noted the status of liquid marketable investments and the surplus cash and bank balance of the Company.

The Company does not have any plan in the near future for major capital investment or expansion or business acquisition. These facts when reviewed against the management's overall objective of maximizing shareholders' wealth, has lead the management to consider a buyback of the equity shares of the Company as an effective way of utilizing the liquid surplus being more than what is needed for its regular business operations. The buyback (including the transaction costs and applicable taxes) will be funded from the accumulated surplus funds / internal accruals available with the Company, in the form of cash and/or liquid marketable investments, and will be drawn out of the free reserves of the Company, in accordance with Section 68(1) of the Companies Act, 2013.

The buyback is expected to:

- reduce the fully paid up, issued and outstanding number of equity shares of the Company and consequently increase the earnings per share over a period of time;

- effectively utilize surplus cash; and

- make the balance sheet leaner and more efficient to improve key ratios like return on net worth, return on capital employed etc.

The Board of Directors, further took into consideration various factors, including but not limited to, the book value of the equity share of the Company, post buyback financial ratios, post buyback debt to equity ratio, market value, liquidity position, possible impact of the buyback on the Company's post buyback equity share capital and earnings per share of the Company.

Subject to such other approvals, permissions and sanctions as may be necessary, the consent of the Board of Directors of the Company ("Board") be and is hereby accorded to buyback the Company's fully paid up equity shares of face value Rs.10 each ("Equity Shares") upto 861915 Equity Shares (representing 6.81% of the total existing issued and outstanding number of Equity Shares of the Company) at a price of Rs. 222 (Rupees Two Hundred Twenty Two Only) per Equity Share ("Buyback Price"), payable in cash, for an aggregate amount of upto Rs. 19,13,45,130/- (Rupees Nineteen Crores Thirteen Lakhs Forty Five Thousand One Hundred Thirty Only) ("Maximum Buyback Size") (excluding transaction costs viz. brokerage, advisor's fees, intermediaries fees, public announcement publication fees, filing fees, turnover charges, applicable taxes such as securities transaction tax, goods and services tax, stamp duty, other incidental and related expenses and excluding income tax (including income tax on buyback)}, which represents 7.52% and 3.88% of the Company's total fully paid-up equity share capital and free reserves (including securities premium account} as per the latest audited standalone financial statements and consolidated financial statements, respectively, for the financial year ended March 31, 2020 through the 'tender offer' method, on a proportionate basis, as prescribed under the Buyback Regulations, from the equity shareholders / beneficial owners of Equity Shares of the Company, as on the record date("Buyback").

The record date for the Buyback has been fixed as Friday, February 26, 2021, for determining the eligible shareholders from whom the Buyback of Equity Shares shall be made.

Shares of GUJARAT APOLLO INDUSTRIES LTD. was last trading in BSE at Rs.237.1 as compared to the previous close of Rs. 238.8. The total number of shares traded during the day was 2200 in over 166 trades.

The stock hit an intraday high of Rs. 249.95 and intraday low of 224. The net turnover during the day was Rs. 523670.

Source : Equity Bulls

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