Redington approves buyback but stock slumps

The board of Redington approved the buyback of 1,11,20,000 equity shares on Monday. The company will buy back at a price of Rs. 125 per share, which represents almost 20 per cent premium from its current market price of Rs. 104 per share.

The total amount that the company plans to spend on buyback is Rs. 139 crore. The company has fixed September 28, 2018, as the record date for determining the entitlement of buyback.

Earlier this month, the company informed the bourses that it has increased its stake in ProConnect Supply Chain Solutions from 76 per cent to 88 per cent for cash consideration of Rs. 6.77 crore.

However, it seems that investors are not excited with this development as the stock of Redington is trading at a negative mark. On Tuesday, the stock opened at Rs. 107.4 per share and at 11.30 hours the stock was trading at Rs. 103.7 apiece down by almost 3 per cent from its previous close.

Redington India which started its business operations in the year 1993 as a distributor of HP Printers in India has expanded itself to distribute other PC components. From being a single brand distributor in 1993, the company today has established partnerships with more than 200 leading global brands from 24 countries. Its business model has evolved from volume‐driven products such as printers and PCs, and components such as hard disks, memory chips and processors to value‐oriented technology distribution of enterprise and infrastructure products.