RIL will buy back up to 12 crore shares worth Rs10,440 crore from the open market at a maximum price of Rs870 apiece. The buyback will result in reduction of number of shares accompanied by possible increase in earnings per share and return on capital employed, the company said in a statement

New Delhi: The country’s most-valued firm Reliance Industries (RIL) today said its Rs10,440 crore share buyback offer will start from 1st February and will close on 19 January 2013, reports PTI.

In a public announcement, Reliance Industries said that the buyback which is possibly the largest such programme in the history of the Indian capital market, would start on 1st February and closes on 19th January next year (12 months from the date, the board of directors of the company approved the buy back).

RIL would buy back up to 12 crore equity shares worth Rs10,440 crore from the open market at a maximum price of Rs870 apiece in its first share buyback since 2005.

“The buyback is expected to increase shareholder value.

The buyback of equity share will result in reduction of number of shares accompanied by possible increase in earnings per share and return on capital employed,” RIL said.

“The buyback will also provide a tax efficient mechanism to return money to shareholders and create long-term value for continuing shareholders,” RIL added.

Citigroup global Markets and DSP Merrill Lynch has been appointed as the managers to the buyback offer.

Shares of RIL jumped by 2.21% in early trade. In The shares were quoted at Rs 784.80, higher by 1.79%, on the BSE at 1305 hrs.

Analysts said share buyback could be aimed at helping the stock regain its lost glory, given their sharp plunge of 35% last year, against a fall of about 24% in the market benchmark Sensex.

Shares of the company had tumbled by 3% yesterday after the company reported its first drop in quarterly profit in more than two years due to falling refining margins.

Analysts had also attributed to the fall in share price to size of the buyback, which represented 3.7% of the company’s equity capital. RIL had in December 2004 offered to buyback 10% of its equity at Rs570 per share.