Man Infraconstruction shares fall; Rs 169 crore buyback approval in focus

Man Infraconstruction Ltd shares fell 4 per cent in Wednesday's trade despite the company's board approving a buyback of up to Rs 169.29 crore through the open market. The buyback will be carried out at a maximum price of Rs 171 per equity share, according to the company's exchange filing.

The stock opened at Rs 124.99 against the previous close of Rs 124.56 on BSE and hit a low of Rs 119.11. At the day's low, the stock was down 4.38 per cent from the previous close. It touched a high of Rs 125.08 before closing at Rs 123.27, down 1.04 per cent. The maximum buyback price of Rs 171 represents a substantial premium to the stock's market price.

Under the proposed buyback, Man Infraconstruction will purchase shares from shareholders and beneficial owners other than promoters, the promoter group and persons in control. The buyback will be conducted through the open market mechanism on both the NSE and BSE.

At the maximum buyback price and size, the company proposes to buy back up to 99 lakh equity shares. If shares are bought at a price below Rs 171, the actual number of shares bought back may be higher, subject to the maximum buyback size.

The company will utilise at least 75 per cent of the maximum buyback size, or Rs 126.97 crore, for the offer. Based on the maximum buyback price, this translates into a minimum purchase of 74.25 lakh equity shares. The company will also ensure that at least 40 per cent of the maximum buyback size, or Rs 67.72 crore, is utilised during the initial half of the offer period.

The Rs 171 maximum buyback price represents a 50.18 per cent premium to the closing market price on BSE and NSE on August 26, according to the board resolution.

The company said the buyback price was arrived at after considering factors including market-price trends, its net worth and the potential impact of the buyback on earnings per share and other ratios.