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The Board of Directors of the Company in their meeting held on 17th February, 2016 has approved a proposal to buyback Equity Shares of the Dr Reddy's Laboratories. It is subject to approval by the shareholders, for an aggregate amount not exceeding Rs 15,694 million (hereinafter referred to as the "Maximum Buyback Size") and (being 14.9 percent of the total paid-up equity capital and free reserves of the Company as on March 31, 2015 (being the date of the last audited accounts of the Company), at a price not exceeding Rs 3,500 per Equity Share (hereinafter referred to "Maximum Buyback Price" and such Buyback the "Buyback") from all shareholders of the Company (including persons who become shareholders by cancelling American Depository Shares and receiving underlying Equity Shares, and excluding the promoters and promoter group of the Company).
Under the open market route in accordance and consonance with the provisions contained in the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 ("Buyback Regulations") (including any statutory modification(s) or re-enactment of the Act or Buy-back Regulations, for the time being in force) and the Companies Act, 2013 and rules made thereunder.
In accordance with the provisions of Regulation 15(b) of the Buy-Back Regulations, the Buyback shall not be made from the promoters and promoter group of the Company. The Maximum Buyback Size, excludes transaction costs viz. brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty etc ("Transaction Costs").
The Maximum Buyback price represents 18.6 percent premium, compared to the average of the weekly high and low of the closing share price of the Company during the last two weeks (i.e. up to February 16, 2016).
The Buyback is proposed on 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.