New Delhi : Drug major Dr Reddy’s Laboratories Ltd will buyback around 44.85 lakh shares, accounting for about 2.6% of the existing paid up capital of the company, for up to Rs 1,569.4 crore at a price of up to Rs 3,500 per share.
At Rs 3,500 a share, the buy back price is at a sharp premium to spot prices. On Wednesday, shares of the firm ended up 3.7% at Rs 2,960. “The buyback is proposed on the account of the company’s strong cash flow position and is expected to be EPS accretive contributing to an overall enhancement of value for shareholders going forward,” Dr Reddy’s Laboratories said.
The share buyback offer comes at a time when the drug maker is facing heat from the US Food and Drug Administration (USFDA) for manufacturing norm violations at three of its plants. The proposed buyback is subject to approval by the company’s shareholders.
