Atul Buyback 2023 vs Somany Ceramics Buyback 2023

The buyback is being undertaken by the company to return the surplus funds to the equity shareholders of the company additionally the company believes that the buyback will improve the earnings per share by reduction in the equity base, thereby leading to a long term increase in the value of shareholders.

The Buyback of shares by the company is proposed to reward the equity shareholders by way of returning surplus funds which is excess of the requirements for ordinary capital expenditure and current investment plan, in an expedient, effective and cost-efficient manner. Below is the broad reason of the proposed buyback.

1. The company has no major capital expenditure/investment planned immediately. Hence surplus cash can be used to reward shareholders.
2. The buyback will help the company to do a fair distribution of Surplus cash to its equity shareholders broadly in proportion to their shareholding, resulting in enhancing the overall return to shareholders.
3. The buyback will help to optimize the capital structure, thereby reducing in Weighted Average Cost of Capital
4. The buyback will help in improving the financial ratios such return of equity, return on capital employed and earnings per share
5. The Buyback gives choice to the shareholders either to participate in the buyback and monetize their shareholding or not to participate in the buyback and get the resultant increase in their shareholdings of the company post-buyback, without additional investment.