After news about companies buy back came ,i was just checking companies share holding pattern,in " Shareholding belonging to the category "Public" and holding more than 1% of the Total No. of Shares"there is two companies starting with "reliance" name Reliance Chemicals Limited,Reliance Polyolefins Limited , both these companies are mentioned in "Major Subsidiaries & Associates" in reliance site.Because its not mentioned in Promoters holding,if reliance buy back shares from these companies, that also became a buy back.The company has to buy 25 per cent of the total offer or 3 crore shares in the offer, under existing rules on buyback of shares. If this is going to happens then its a transfer of fund from parent to a subsidiary will happens .
Why a company Buy Back Shares ?
If a company is continuously giving good results still trading in a lower P.E than its peers , and company have cash in its balance sheet ,then a buy back is a good option.Here in reliance case company is a underperformed over the past one year,and this time result also disappoint.
So entering to reliance saying company value per share @ 870 is foolishness.
*disclosure about our trading is given in previous posts
Why a company Buy Back Shares ?
If a company is continuously giving good results still trading in a lower P.E than its peers , and company have cash in its balance sheet ,then a buy back is a good option.Here in reliance case company is a underperformed over the past one year,and this time result also disappoint.
So entering to reliance saying company value per share @ 870 is foolishness.
*disclosure about our trading is given in previous posts
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