piramal buy back

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Neelam (Querist)
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13 December 2010 hi everyone,

I have 1 query.A company called piramal healthcare is coming up with buy back offer.Now this company is going to buy at Rs.600 per share.The specified date for this buyback would be 8/01/2011.as on date this companies share price is Rs.450.
Now i want to ask that if i purchase shares of the company today at Rs.450,whether i will b eligible for buy back. If yes then evrryone will purchase share at 450 & opt for buy back & make profit.. Please help me to clear ma confusion..

Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 December 2010 See the buyback of for 20% of the capital and not the entire shares capital of the company. So if everyone offers shares for buyback then you have 1/5 chance of getting the buyback offer.

Neelam

Neelam (Querist)
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13 December 2010 agreed but then my point is if i buy shares now then will i be eligible for buyback??though i know my chances will be 1/5th..i just can not digest howz this poss??coz any1 may buy in bulk and take benefit..

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 December 2010 Yes you can also buy in bulk and take benefit of this. The main reason for all in price of the share at the time of announcement was that the shareholders were expecting dividend on shares and instead of dividend the company had declared buy back of shares @ Rs. 600/- for 20% of the shares. Even now it is trading as Rs. 460/- which is very less as compared to Rs. 600/-.

Also do u remember the ranbaxy buyback offer where the shares were traded at almost half the price but the buy back was made Rs. 737/-.