Cera Sanitaryware Announces First-Ever Buyback: Stock Gains

Shares of Cera Sanitaryware Ltd. experienced a slight uptick on Monday, August 5th, gaining just over a percent. This increase came in response to the company’s announcement that its board has approved a buyback of its equity shares. 

Buyback Details

Cera Sanitaryware plans to buy back up to 1.08 lakh equity shares, which constitutes 0.83% of the total paid-up equity share capital. The total amount allocated for this buyback is Rs 130 crore. The record date for the buyback has been set for August 16, 2024.

Premium Price

The price for the buyback has been fixed at Rs 12,000 per share. This price represents a 34% premium over the closing price of the stock on the previous Friday. Such a premium indicates the company’s confidence in its own value and its intention to reward its shareholders.

Share Buybacks

Many companies are announcing buybacks following the recent budget amendment regarding the taxation of buybacks, which will be taxed in the hands of shareholders starting October 1.

Historic Move by Cera Sanitaryware

This buyback marks the first-ever such initiative by Cera Sanitaryware Ltd. The last significant shareholder reward by the company was a bonus issue in 2010, in the ratio of 1:1. 

Dividends 

Alongside the buyback initiative, Cera Sanitaryware Ltd. declared a final dividend of Rs 60 per share for the current year, building on the Rs 50 per share dividend distributed in 2023. This consistent dividend payout underscores the company’s ongoing commitment to delivering value to its shareholders.

As of the end of the June quarter, promoters held a 54.48% stake in the company. Mutual funds also had a notable stake, holding 6.80% of the company’s equity.

Stock Performance

Following the buyback announcement, shares of Cera Sanitaryware Ltd. traded 1.02% higher at Rs 9,030. The stock has shown a positive trend, being up 14% so far in 2024. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.