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Aarti Drugs zooms 12% ahead of board meet to consider share buyback; check key details
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2 min read | Updated on August 22, 2024, 12:57 IST
SUMMARY
Aarti Drugs shares soared over 12% after the company scheduled a board meeting on August 26, 2024, to consider a share buyback proposal. The pharmaceutical company has previously conducted five buybacks, with the latest proposed buyback set to follow SEBI’s regulations. The stock was trading at ₹566.80, up 6.14% on Thursday morning.
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Aarti Drugs zooms 12% ahead of Board meet to consider share buyback
Aarti Drugs informed the exchanges on August 21 in a filing that a meeting of the company's board of directors is scheduled for August 26, 2024. The board will consider the proposal to buy back fully paid-up equity shares of face value ₹10 each, which was announced last month.
The pharmaceutical company also mentioned in the filing that the trading window for dealing in the company's shares by designated persons of the company and their immediate relatives will remain closed from August 21 to August 28.
Aarti Industries conducted its first share buyback in 2016. If approved by the board at the upcoming meeting, the current share buyback plan will be the sixth instance of the company purchasing its shares from its shareholders. The company has also conducted share buybacks in 2018, 2019, 2021, and 2023.
As per SEBI regulations, companies can conduct a share buyback after completing a cooling-off period of 365 days from the date of the board approval between two successive buybacks.
Earlier this year, Finance Minister Nirmala Sitharaman made tax changes during her budget speech regarding the income earned from the buyback of equity shares. After the changes in taxation, the income received from the buyback of equity shares will be taxed in the hands of the shareholder and not the company. The changes in taxation of buyback will come into effect on October 1, 2024.
Earlier on August 3, the company informed the exchanges that it had received a show cause notice from the Central Goods and Services Tax (CGST) and C.Ex. Authority. The notice was in contravention of Rule 96(10) of the CGST norms. The notice proposed an Integrated Goods and Services Tax (IGST) demand of ₹230.7 crore along with applicable interest and penalty for FY 2017-18 to FY 2021-22. The pharmaceutical company said that it would file a reply to the notice before the adjudicating authority.
Aarti Drugs shares are trading at ₹566 apiece on the NSE, up by 6.1%, at 11:15 am.
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