This stock announces buyback of share at a 100 per cent premium, watch out!

The buyback of share is announced at Rs of 2000 per share which is almost double of its current market price.  

Symphony was established in 1988, in Ahmedabad, India. The company is engaged in the manufacturing and trading of residential, commercial and industrial air coolers in the domestic and international markets. It is the largest air cooler manufacturer in the world. Lions share of the company’s revenue comes from air coolers.  

Symphony stock is all gun blazing on Wednesday trading session as it has jumped over 8 per cent along with more than threefold rise in the total traded volume as compared its 50-days average volume.  

The key catalyst for the roaring up move in the stock is its financial result and announcement of a buyback. For the quarter ended December 2022, its total revenue stood at Rs 291 crore as against Rs 212 crore in the same period of last year. Net profit almost doubled in the quarter ended December 2022 as it surged to Rs 39 crore as against Rs 21 crore in quarter ended December 2021.  

Now, the cherry on the top is the proposal for buyback of fully paid-up equity shares of the company having a face value of Rs 2. The buyback of share is announced at Rs of 2000 per share which is almost double of its current market price.  

The aggregate amount of total buyback is not exceeding Rs 200 crore, excluding expenses to be incurred for the buyback brokerage costs, fees, turnover charges, taxes such as tax on buyback, securities transaction tax and goods and services tax (if any), stamp duty, printing and dispatch expenses, if any, filing fees to SEBI, stock exchange charges, advisor/legal fees, public announcement publication expenses and other incidental and related expenses and charges. 

Equity Shares to be bought back at the Buyback Offer Price shall not exceed 10,00,000 Equity Shares, representing 1.43 per cent of the total number of Equity Shares in the total paid-up equity capital of the Company as on March 31, 2022.  

The Buyback Offer Size represents 24.76 per cent and 24.69 per cent of the aggregate of the Company’s fully paid-up equity capital and free reserves as per the latest standalone and consolidated audited financial statements of the Company, respectively, for the year ended March 31, 2022, which is not exceeding than 25 per cent of the aggregate of the total paid-up capital and free reserves of the Company in accordance with Regulation 4(i) of the SEBI Buyback Regulations.