Sun Pharma stock gains 7% as firm announces Rs 1,700-crore share buyback

Sun Pharma shares rose over 7% on Tuesday after the pharmaceutical firm said it's board has approved a buyback offer of equity shares worth Rs 1,700 crore.

"The board announced buyback through the open market stock exchange mechanism at a maximum price of Rs 425 per equity share for an aggregate maximum amount of up to Rs. 1,700 crore, which represents 9.83% and 4.44% of the total paid-up equity share capital and free reserves, from the equity shareholders/beneficial owners of equity shares of the company," the company said.

Following the update, Sun Pharma shares touched an intraday high of Rs 395.15, rising 7.14% against the earlier close of Rs 368.80 on BSE.

The exchange filing further said, "At the Maximum Buy-back Size and the Maximum Buy-back Price, the indicative maximum number of equity shares to be bought back under the buyback would be 4 crore equity shares, representing 1.67% of the total number of equity shares of the company."

As of March 13, 2020, promoters held 54.69% stake in the company.

However, the actual number of shares to be bought back during the buyback offer will depend upon the actual price paid for the shares and the aggregate actual amount utilised in the buyback, the filing added.

The public announcement setting out the process, timelines and other requisite details will be released in due course, as per the buyback regulations, Sun Pharma said.

Although due to a volatile market, shares of Sun Pharma erased early gains and closed 0.47% or 1.75 points higher at Rs 370.55 on BSE.