DLF buys back just Rs 86 cr worth of shares

Three months since its buyback programme got underway, real estate major DLF has so far bought back shares only worth Rs 86 crore. The company has allocated Rs 1,100 crore for the buyback scheme, which will close on July 9 this year. Unlike many other companies which stepped up their buyback process amid bearish market conditions, the Delhi-based realty giant has decided to restrict its open market purchases to once a week. Since October 17 last year, DLF has bought a total of 38,65,767 shares so far, as per stock exchange statistics. The open market transactions were carried out on 15 days in the past three months. Assuming that shares were bought at closing prices on those days, the company is estimated to have spent Rs 86 crore on the buyback programme. DLF had said it would buy back the shares at a price not more than Rs 600 apiece. Since the beginning of the offer, the stock has been trading in a range between Rs 179 and Rs 316. The scrip had scaled its peak of Rs 1,080 on January 18, 2008. "We have the option of buying back shares up to 55 lakh shares, which is the lower limit, or 2.2 crore shares on a higher side. We will continue buying back shares till the completion of the offer," said a DLF spokesperson. DLF has been one of the worst losers in the ongoing market meltdown, shedding around 60% since the beginning of 2008. When DLF had announced the buyback programme, many analysts and fund managers were sceptical if it would support the stock price, and also voiced concerns that it may be against the long-term interest of shareholders. DLF’s core operations continue to lose cash and the company is sustaining its operations though the IPO money raised last year, fresh borrowing, and through sale of equity in various special purpose vehicles (SPVs). Quite a few companies have taken the advantage of beaten down valuations to buy back a large number of shares in the past one year. Reliance Infrastructure is one notable example where the company acquired a total of 92.6 lakh shares under its buyback programme between March and December 2008. The company had earmarked a sum of Rs 800 crore to buy back shares at a maximum price of Rs 1,600 per share.