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Buyback extended; FII limit hike on cards

Our Bureau

MUMBAI, April 30

RELIANCE Industries Ltd has extended the share buyback programme for one more year as it has not bought back any shares during the current buyback period. The company is seeking to increase the limit for foreign institutional investors (FIIs) to 49 per c ent of its equity.

The necessary resolutions would be moved at the company's forthcoming annual general meeting (AGM).

The company said that during the current buyback programme valid up to May 18, the scrip closed below the specified maximum buyback price of Rs 303 per share on 11 days out of a total 264 days that have elapsed since the announcement of the buyback last year.

The last AGM had approved buyback for an amount not exceeding Rs 1,100 crore up to a maximum price of Rs 303 per share through open market purchases.

The RIL Managing Director, Mr Anil Ambani, said that the specified buyback price had effectively served as the floor price for the company's share even though the company had not so far deployed any amount for the buyback.

Mr Ambani said this was in sharp contrast to the experience of many other Indian companies which have seen their share prices trading well below their specified buyback prices even after they had deployed significant amounts towards share buyback during last year.

"RIL views share buyback as a long-term measure to enhance overall shareholder value and not a mechanism to artificially support any particular price level for the company's share or to respond to short-term speculative pressures," Mr Ambani said.

Commenting on the need to increase the FII limit, Mr Ambani said this would result in increased weightage for the company's share in benchmark international stock indices. A large number of FIIs decide their investments on the basis of such benchmark ind ices, he said.