Buyback at 20 per cent premium helps Dhanuka Agritech gain 9 per cent

The shares of agrochemical firm, Dhanuka Agritech Ltd gained as much as 10 per cent intraday after its board approved the buyback of equity shares, on Wednesday. The shares of the company are trading near its 52-week high on BSE.

Momentum in the share price can be expected to continue as the buyback is proposed at Rs 1,000 per equity share, which is at 22 per cent premium from its Tuesday closing price.

Reacting to the high premium in the buyback offer, the stock gained 10 per cent in the afternoon session. The share buyback is the way, in which, the company passes on the benefits to the investors. Besides, the other way is a dividend. In this, as the market price is trading at Rs 890 (indicative price on BSE), the company has offered to buy back shares at Rs 1,000 per share price. Hence, this incentivises the investors who bought them at lower prices. The buyback is of Rs 100 crore, which will include a proposal of 10,00,000 equity shares by the company from its existing shareholders.

The shares of Dhanuka Agritech Ltd has surged as much as 135 per cent since July last year. Despite all the headwinds of COVID and other disruptions, the stock gained its multi-year highs on BSE.

The stock of Dhanuka Agritech closed at Rs 894 on Wednesday, higher by 8.9 per cent.