Tips makes buyback offer

MUMBAI: Sending strong signals to the market that the music and movie company is on a major growth curve, Tips Industries said Wednesday it intends to buy back shares at a premium from its prevailing price.

The buyback offer price would not exceed Rs 75 per share, Tips said. The shares of Tips rose 6.24 per cent to close today at Rs 50.25 on the BSE.

Tips said that the amount would not exceed Rs 198.10 million, being 25 per cent of aggregate of paid-up equity capital and free reserves of the company as on 31 March 2009.

The offer will open on 17 March and close on 23 August. "The proposed buy back is expected to lead to reduction of outstanding equity shares, which may in turn increase the earnings per share and return on equity of the company in future, thereby creating long-term shareholder value for the continuing shareholders. The proposed buy-back is also a reflection of confidence of the management in the future growth prospects of the company,” Tips said.

Tips’ promoters currently hold 9.52 million shares, representing 54.99 per cent of the company. Post buy back, promoters‘ holding will increase to 64.9 per cent. Also, the promoters will apply for exemption from making an open offer as required by regulation 11 of the Takeover Regulations after completion of buy back of such number of Equity Shares by the Company, which would result in an increase of 5 per cent voting rights in the company.

Collins Stewart Inga is managing the issue for Tips.

Tips produced the latest hit Ajab Prem Ki Gajab Kahani. The company posted a net profit of Rs 114.54 million on a turnover of Rs 662.98 million for the fiscal ended 31 March 2009.

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