Indiabulls’ Rs624cr buyback proposal fails to bring positive results

Indiabulls Real Estate Ltd's (IBR) Rs624cr buyback has failed to bring any cheer to investors as the stock dropped nearly 5 per cent in intra-day trade. IBR's board in post market hours announced that it will buy back 2.6cr fully paid up equity shares of the company at a price not exceeding Rs240/share aggregating upto an amount of Rs624cr, being less than 10% of the total paid up share capital and free reserves of the company. The main objective was to optimise returns to shareholders without compromising on high growth opportunities.The management also added that the proposed buyback will make the balance-sheet of the company leaner by reduction in overall capital employed in its business, which will also lead to higher earnings per share and enhanced return on equity. In the first week of May, IBR sold its Chennai commercial asset of Rs900cr named ‘One Indiabulls Park’ to ‘Blackstone’. Recently, IBR also entered into a binding and definitive agreement to acquire a newly constructed commercial building in Gurgaon, through its wholly-owned subsidiary YashitaBuildcon. IBR's total annualized annuity revenue would be Rs1,513cr in 2020-21, with this accession.