Mobile Reviews

Investors’ loss seems to be promotors’ gain. While investors have turned cautious as stocks plummet, promoters appear to hold a more 
optimistic view. Several companies are lining up share repurchase programme, banking on the long-term growth of their enterprise.

Last week, four companies — EID Parry, Monnet Ispat & Energy, Godawari Power & Ispat and Maestros Mediline Systems — announced share buyback proposals. Share repurchase, a common practise in a bear market, has spread across the world with firms like Microsoft, Abott, Nike and Hewlett Packard taking the path.

Interestingly, the buyback volumes in many countries like Brazil, Mexico and China, besides India, have seen huge growth this year. India’s buyback volumes soared to a record $1.4 billion in 2008 till now, an increase of 268% over 2007, making it the second most active market after China in Asia, according to Thomson Reuters. Topping the list is Reliance Energy’s buyback in March, valued at $886 million.

Over 20 companies, irrespective of size and across sectors, have either completed or are in the midst of buyback in the last 10 months. These include Hindustan Unilever, Sasken Communication, DLF, Rain Commodities, Madras Cement, Patni Computers, Gateway Distriparks, Great Offshore, Ganesh Housing and R-Systems.

The sensex, after reaching 21,000 in January, has touched new lows, with share prices of companies falling by over 40%. ‘‘This (low valuations) provides an opportunity for companies to go for share buyback,” said an executive from domestic brokerage firm. READ AT TIMES OF INDIA