Shares of SoftBank Group Corp. jumped 17% on Thursday, the highest since 2008 November, after its founder, Masayoshi Son, revealed plans to repurchase stocks worth 600 billion yen ($5.5 billion). The market cap shot up by $17.6 billion. The biggest ever buyback by SoftBank, is aimed to bridge the gap between the company’s intrinsic worth and market value, Son said. The company has net assets of 21 trillion yen while the market cap stood at 9 trillion yen. The buyback will be funded through proceeds from the 2.4 trillion yen IPO of the company’s telecommunications unit in December.
Coal India Ltd on Wednesday said its board would consider and approve buyback of its equity shares on February 4. The company, on Tuesday, had announced that its three subsidiaries - Mahanadi Coalfields, South Eastern Coalfields, and Northern Coalfields - proposed to buy back their equity shares aggregating Rs 1,065 crore (Rs 355 crore each). Shares of Coal India on Wednesday closed at Rs 225.45, up by 1.21% on BSE.
According to analysts, capital goods and engineering major Larsen & Toubro is likely to opt for the special dividend route after its Rs 9,000 crore buyback programme was rejected by market regulator SEBI. Alternatively, analysts believe the company could appeal to the regulator to get the buyback proposal approved or try to seek an exemption since the special dividend is not a tax-friendly route. SEBI had turned down the buyback plan of the company, saying that the debt-equity ratio would exceed two times, violating the provisions of the Companies Act and SEBI's regulations.