Jai Corp to Buy Back 1.65% Stake at Rs.400 Per Share

Jai Corp Ltd., known for its steel, plastic processing, and spinning yarn businesses, is making its first foray into share buybacks. Founded in 1985, the company is now planning to repurchase 29.44 lakh shares, representing 1.65% of its total equity. The buyback is priced at Rs.400 per share and is offering a 2% premium over the current market price of Rs.392.50.

This buyback, valued at Rs.17 crore, will be conducted through the “tender offer” route,making sure that the price remains fixed throughout the process. The company’s board has formed a subcommittee to oversee the buyback, with the authority to manage all aspects of the process. Reportedly, the promoters of Jai Corp have also shown their intent to participate in this offer, signaling their confidence in the company.

How It’s Going Down

To manage this buyback smoothly, Jai Corp has brought in Navigant Corporate Advisors Limited as the manager for the process. Shareholders looking to benefit from the buyback need to keep an eye on September 10, 2024, which has been set as the record date. This date will determine who is eligible to participate in the buyback.

Market & Share Performance

News of the buyback sparked some action in Jai Corp’s stock. The share price briefly rose by 3.68%, reaching Rs.406.65 on the NSE, before closing slightly higher at Rs.392.50. While the stock has dipped 10% so far this year, it’s worth noting that it has surged by a whopping 60.95% over the past 12 months. This shows that despite some declines, the company has maintained strong momentum.

Conclusion: Taking  the Bigger Picture, by offering a 2% premium on the current stock price, the company is signaling its belief in its long-term potential. With promoters also backing the buyback, it’s clear that Jai Corp will be interesting to watch in the coming months. 

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.