What brokerages say on Reliance buyback offer
Further, the company has also appointed Mike Lazaridis, former Co-Chairman and Co-CEO, as Vice Chairman of RIM's board and Chair of the board's new Innovation Committee, with immediate effect.
Reliance Industries’ board approved a buyback of 12 crore shares, which is 3.6 per cent of equity, on Friday. The buyback will be at a maximum price of Rs 870 per share and the aggregate amount shall not exceed Rs 10,440 crore.
Here is what brokerages say on the buyback offer:
Goldman Sachs:
Buyback to add 1% net to earnings per share (EPS)
Expect RoE (return on equity) to improve by 25 basis points (bps)
Morgan Stanley:
Buyback a key positive if executed well
Company can support the stock via its open market purchases
Shares bought back would be cancelled
Buyback EPS-accretive by 2% and RoE-accretive by 50 bps
BNP Paribas:
Disappointed by the buyback amount
Price was a slight positive surprise
RIL’s past history of buy-backs is not encouraging
Buyback to protect the downside until RIL works on addressing the E&P issues
Do not expect the buy-back to be the catalyst to result in a re-rating
Citi:
Estimate the buyback to be EPS accretive
Buyback to add 1% to EPS if executed fully
Kotak:
Sizable buy-back program will likely provide support to stock price
Shows the management’s intention to return cash to shareholders
Buy-back program will also provide a floor of Rs 800-825/share