Shares of Sun Pharmaceutical Industries rallied over 8 per cent a day after the company informed that its board will be meeting next week to discuss a proposal for buyback of shares.
On the BSE, the Sun Pharma share closed at Rs 384.45, higher by Rs 29.60, or 8.34 per cent. During intra-day trade, the stock had hit a high of Rs 402.85, a gain of 13.52 per cent . Around 5.34 lakh shares were transacted on the exchange.
In an announcement after market hours on Thursday, Sun Pharma said its board will consider a proposal for buyback of shares on March 17.
Sun Pharma added that according to its code of conduct for prevention of insider trading, the trading window for dealing or trading in securities will remain closed with immediate effect for all directors, designated persons and insiders. It will reopen after the expiry of 48 hours following the conclusion of the meeting.
In a share buyback, a company buys its shares from the market which are subsequently extinguished. Buybacks generally improve a company’s EPS and helps to return the surplus cash to shareholders, while also supporting the share price during sluggish market conditions.
