To: Mohan Marette who wrote (3207 ) 11/15/1998 3:52:00 PM From: Mohan Marette Read Replies (1) | Respond to
Possible stock buy-back candidates in India. Reliance Industries, Grasim, Tata Chemicals, Tata Power, Finolex Cables, Bharat Petroleum, Bharat Electricals, Balrampur Chini, Motherson Sumi, Electrosteel Castings, Dalmia Bharat, Coates of India, and Hawkins Cookers are some of the corporates which may resort to share buyback with the stated objective of enhancing shareholder value. The share prices of these companies are quoting at levels lower than their intrinsic worth. These companies have low debt-equity ratios and are in a position to borrow funds to buy back their shares. As buybacks will reduce the size of the equity base, earnings per share would automatically rise, resulting in share price capital appreciation, read otherwise as enhancement of shareholder value. Great Eastern Shipping, Maharashtra Scooters, EID-Parry, Subros, Munjal Showa, Navneet Publications, Elgi Tyres, and Indo National in the group of companies which are cash-rich, generate larger earnings than required in the business and whose shares are still quoting at relatively low prices. Most of these companies deploy their surplus funds in treasury operations. It may turn out more profitable, it is argued, for them to buyback shares with such surplus funds and reward shareholders......Bombay Dyeing, Crompton Greaves, Kirloskar Oil, Jay Shree Tea, Greaves Limited and Elpro International are some of the companies which may use buyback route to restructure their businesses... Otis Elevator, Revathi CP, SmithKline Beecham Consumer are some of the companies where the foreign parent's holding could be raised to the permitted limit of 51 per cent through buyback of shares. These companies also have large cash surpluses to buy back their shares. MRF, Lakshmi Machine Works and some Tata companies may fall in this category MTNL, VSNL, Nalco and HPCL are listed in the group where the promoters' holdings could be diluted through the buyback route.....economictimes.com
