NEW DELHI: Hindustan Petroleum Corporation Ltd (HPCL) on Wednesday announced share buyback worth Rs 2,500 crore at 34 per cent premium, even as the second-largest oil refiner and fuel retailer more than doubled its September quarter profit to Rs 2,477 crore from Rs 1,052 crore in the previous corresponding period.
Company chairman M K Surana said the shares will be bought back from the market to “unlock value” for investors and “reward those who have remained invested,” including minority shareholders. Parent ONGC, the flagship explorer, will not offer any share from its kitty for the buyback.
HPCL will buy back some 10 crore shares, accounting for 6.56% stake, at Rs 250 each, or a 34 per cent premium on Wednesday’s closing price of Rs 187.20 on the NSE.
Surana said this was a good time for buyback as the stock price was low and funds were also available at cheaper rates. “We believe that HPCL share has a lot more intrinsic value than what it is reflecting right now. HPCL has been liberal in rewarding its shareholders and buyback is one of the ways (to do that),” he said, adding it will also give a good opportunity to those who want to exit.
