Shares of Indus Towers Ltd. are trading flat after touching a day’s high of Rs 448.75 on 31 July, after the company approved a buyback of its equity shares and announced its June quarter results after market closing on Tuesday.

A buyback of up to 5.67 crore equity shares, comprising 2.1 percent of the total equity shares of the company, has been approved, it added. The total buyback consideration would be Rs 2,640 crore.

The company will buy back shares at Rs 465 each, a 4% premium over the Tuesday closing price of Rs 447.95. Indus Towers shares have risen 120% YTD.

The buyback would be done through the route of “Tender Offer,” where shares would be bought back at a predetermined price. This is also Indus Towers’ first share buyback in eight years; the last one was in 2016 when it was known as Bharti Infratel.

The record date for the same is 9th August 2024. IIFL Alternative Research estimates a general acceptance ratio of 3.6%, excluding Bharti Airtel. The acceptance ratio for retail shareholders is likely to be around 35%.

A rush of buyback announcements on Dalal Street followed FM Nirmala Sitharaman’s recent budget speech. Changes in taxation mean income from buybacks will be taxed at the shareholder level instead of the company. These changes in tax will come into effect from 1st October.

As many as six others have announced or will be announcing buybacks in the near future, including Indus Towers. This also includes Welspun Living, TTK Prestige, AIA Engineering, Savita Oil Technologies, and Cera Sanitaryware. All these announcements or meetings are to happen within a week.

The company reported a 43% increase in net profit for the June quarter, reaching Rs 1,925.9 crore. Revenue for the quarter grew by 4.3% to Rs 7,383 crore. EBITDA rose nearly 30% year-over-year to Rs 4,545.3 crore, while its margin expanded to 61.6% from 49.7% last year.

At 11:00 AM, the shares of Indus Towers were trading 2.23% lower at Rs 437.10 on BSE.

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