Route mobile falls 7% after board approves Rs 120 cr share buyback proposal
Route Mobile board approved the share buyback of up to Rs 120 crore
Route Mobile was trading at Rs 1256.00, down Rs 72.70 or 5.47%
The stock has fallen 28% in the last six months
Route mobile fell 6.93% to Rs 1236.65 after the company’s board approved the share buyback of up to Rs 120 crore at a price not exceeding Rs 1,700 per equity share via the open market.
The maximum buyback price of Rs 1,700 per equity share represents a 27.94% premium to Tuesday's closing price of Rs 1328.70 on the BSE. The indicative maximum number of equity shares bought back would be 705,882 (maximum buyback shares), which is 1.12% of the total number of paid-up equity shares of the company.
"The company's board approved the buyback of equity shares having face value of Rs 10 at a price not exceeding Rs 1,700 per equity share and for an aggregate amount not exceeding Rs 120 crore, from the shareholders of the company, payable in cash via the 'Open Market' route through the stock exchanges mechanism," Route Mobile said in an exchange filing.
According to the company, the share repurchase excludes promoters, promoter groups, and anyone in control of the company.
An open market buyback occurs when a firm purchase shares directly from the market at the current market price. A share buyback program's principal goal is to halt the decline in the value of a stock by lowering supply, which effectively drives up the share price through a higher price to earnings (P/E) ratio.
Despite a recent surge, the stock of the major telecom services provider has fallen 28% in the last six months, compared to an 8.7% drop in the S&P BSE Sensex.
Route Mobile is a cloud communications platform service provider that serves corporations, OTT providers, and mobile network operators (MNO). RML's portfolio includes messaging, voice, email, SMS filtering, analytics, and monetization technologies.
The company's consolidated net profit increased 29.15% to Rs 45.68 crore in Q4 FY22 over Q4 FY21, owing to a 72.74% increase in net sales to Rs 626.07 crore.
Route Mobile was trading at Rs 1256.00 on the BSE at 11:30 a.m., down Rs 72.70 or 5.47%. On 12 October 2021 and 23 June 2022, the share reached a 52-week high of Rs 2,388.10 and a 52-week low of Rs 1,052.60.