Shardul Securities shareholders clear Rs 115.20 crore buy-back at Rs 60 per share

Shardul Securities has secured shareholder approval for a buy-back of up to 1.92 crore fully paid-up equity shares at Rs 60 per share, involving a maximum cash outlay of Rs 115.20 crore, excluding transaction costs.

The proposal, approved by the board on August 12, 2026, was cleared through a special resolution at the company’s 41st annual general meeting held on September 25. The voting outcome was announced on September 29.

The tender offer covers up to 21.94 per cent of Shardul Securities’ paid-up equity share capital and will be undertaken on a proportionate basis through the BSE mechanism. At the proposed scale, the repurchase is a sizeable capital action for the company, whose market capitalisation stood at Rs 498.71 crore based on the supplied market data. The maximum buy-back outlay is equivalent to about 23 per cent of that market value.

The Rs 60 offer price represents a 43.08 per cent premium to the volume-weighted average price on BSE during the three months preceding August 9, when the board meeting intimation was issued. It was also at a 50.26 per cent premium to the BSE closing price on August 7.

As of 3:52 pm on October 1, 2026, the stock was trading at Rs 57.25. This was below the buy-back price, although the company retains the option to increase the offer price and correspondingly reduce the number of shares to be repurchased until one working day before the record date, without altering the overall buy-back size.

The shares were trading about 3.9 per cent below their 52-week high of Rs 59.55. Over the past year, the stock gained 13.05 per cent, compared with a 3.22 per cent decline in the BSE 500, an outperformance of about 16.27 percentage points. However, the shares remain down 31.33 per cent over the trailing two-year period.

The company said the buy-back is intended to distribute surplus funds among shareholders broadly in proportion to their holdings. It also expects the reduced equity base to improve ratios such as earnings per share, return on assets and return on equity. Investors whose shares are accepted will receive cash, while those who do not tender, or whose shares are not accepted, could see their percentage ownership rise without additional investment.

Shardul Securities, a systemically important non-deposit-taking NBFC, is engaged in investment and finance activities, while its wholly owned subsidiary, Shriyam Broking Intermediary, operates the stock-broking business. The group’s earnings are sensitive to movements in financial markets because its portfolio includes quoted equities, Mutual Funds, gold, bullion and fixed deposits.

The buy-back follows a difficult FY2025-26 for the group. On a consolidated basis, Shardul Securities reported a loss after Tax of Rs 49.14 crore, against a profit after tax of Rs 32.99 crore in the previous year. The reversal reflected a Rs 46.41 crore net loss from fair-value changes in investments and a sharp rise in finance costs to Rs 15.33 crore.

The proposed repurchase is within the statutory ceiling. The company said it could buy back up to 2,18,73,041 shares during the financial year, equal to 25 per cent of its 8,74,92,165 outstanding shares. The current proposal for 1.92 crore shares remains below that threshold.

The buy-back size represents 24.92 per cent of the company’s standalone paid-up capital and free reserves, and 14.16 per cent on a consolidated basis, as at March 31, 2026. The company has stated that it has no subsisting repayment defaults and that the transaction will not render it insolvent or push its post-buy-back debt-equity ratio beyond the prescribed 2 to 1 limit.

Promoters and promoter-group members have indicated that they may tender shares in accordance with their entitlement or a lower number. At least 15 per cent of the shares proposed for repurchase, or the entitlement of small shareholders, whichever is higher, will be reserved for small shareholders. The record date and tendering schedule remain key next steps for eligible investors.

Disclaimer: The article is for informational purposes only and not investment advice.