Reliance Energy Ltd shareholders on Wednesday approved a proposal to buy back a part of its equity shares at maximum Rs 525 per share aggregating up to Rs 350 crore (Rs 3.5 billion), even as demonstrators protested against high tariff rates at the annual general meeting in Mumbai.
The company has approved to buyback equity shares at a price not exceeding Rs 525 per share and spend a maximum of Rs 350 crore for the programme, REL chairman Anil Ambani told shareholders at the 75th AGM of the company.
The sum of Rs 350 crore is 10 per cent of the capital and free reserves of the company, he said, adding the company would buy back the shares through open market operations from stock exchanges.
In between, consumers held demonstrations outside REL headquarters and protested against high tariff rates demanding a rate of 75 paise per unit as provided by another city power distributor BEST as against Rs 1.38 provided by REL.
Employee shareholders also held demonstrations alleging that they were prevented from entering the AGM but were later allowed.
Ambani said there has been rise in the bills of the consumers due to increase in fuel adjustment charge by about 100 per cent.
Ambani said the buyback would lead to reduction in outstanding number of equity shares and consequent increase in earnings per share and would send strong signals to the capital markets on under-valuation of the company's stock price and confidence of the management in future growth options.
Ambani said the company was exploring various opportunities to set up gas, wind and hydro-based power generation projects.
It has plans to implement up to 500 MW of wind-based power projects in phases spread across various states, including Maharashtra, Gujarat, Rajasthan, Karnataka, Tamil Nadu and Andhra Pradesh.
REL had received interim permission from the Central Electricity Regulatory Commission to engage in trading of power, he said, adding that the company would source power from generating plants, licencees and captive plants and sell to various licencees and large consumers across the country.
On the EPC and contracts division, REL has decided to focus on the in-house opportunities and selective large projects.
He said transmission and distribution losses were reduced to 12.8 per cent from 13.5 per cent during the year and efforts were underway to bring it down to international standards by enhancing the infrastructure.
Overseas issue deferred
With the board deciding to go for a buyback of equity shares, the proposed second overseas issue of REL for 10 million shares has been deferred for at least six months.
REL shareholders had given their nod through a postal ballot in May for an enabling resolution to issue 10 million shares in the international market, but with the proposed buyback, the issue has been now deferred by at least six months, sources said.
