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Monday, October 20, 2008

DLF india ltd shares buy-back news update

DLF L td. were to commence its share buy-back from 15-10-08 which has been delayed by two days and now rescheduled to 17-10-08 and would last till 09-07-09. The company intends to buy upto 2.20 crore share for which Rs.1,100 crores has been earmarked and at the rate not exceeding Rs.600 per share, from the open market.

Though the delay has happened due to delay in obtaining statutory approvals but the same has been viewed negative by the market and analysts. It is feared that the company may not proceed with significant buy-back as it is facing huge liquidity crunch. With share price now ruling close to Rs.300 per share, entire Rs.1,100 crores can get used very soon, if the company so desires. Also, maybe close to 3.30 crore shares can get purchased, considering an average buying rate of Rs.330 per share. If it is really used to that extent, promoters stake can rise to about 89.90%, which will be within the permissible limits.

The daily reporting of buy-back, to be furnished by the company to the exchanges, would give an indication of the liquidity situation at the company’s end, which would be used as an indication, by the market, overall, for realty sector.

If no significant buying happened, it may act negative on the lines of Reliance Infrastructure, where big announcements of share buy-back were made without witnessing any significant progress in that regard.
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