Zydus Lifesciences share buyback: Zydus Lifesciences said that its ₹1,100 crore share buyback offer will open on Thursday, June 4, and remain available for four trading sessions, with the closing date set as Wednesday, June 10.
Ahead of the opening, the pharma stock was trading 2.5% lower at ₹1,063 apiece on Tuesday, 2 June. share price has gained over 19% in a month and 16% on a year-to-date (YTD) basis.
Zydus Lifesciences share buyback details
As part of the revised buyback offer, the company will repurchase 87,30,158 equity shares. The company had updated the terms last week, increasing the buyback price to ₹1,260 per share from the earlier ₹1,150 per share.
Under the buyback entitlement ratio for small shareholders, the company will accept five equity shares for every 49 shares held as of the record date.
As of the March quarter, had more than 4 lakh small retail shareholders—investors holding shares with a market value of up to ₹2 lakh—who collectively owned 4.8% of the company’s equity.
The company had set May 29 (Friday) as the record date for the buyback. Shareholders who held the company’s shares in their demat accounts by May 28 are eligible to participate and tender their shares under the offer.
For shareholders in the general category, the entitlement ratio has been fixed at seven equity shares for every 937 shares held on the record date.
Zydus Lifesciences share buyback history
This marks the company’s third share buyback since 2022. The most recent buyback was conducted in 2024 at ₹1,005 per share, while the one before that, in 2022, was executed at ₹650 per share.
According to reports, the company’s promoters participated in both of the previous buyback programs.
Zydus Lifesciences share buyback: Should you participate?
Seema Srivastava, Senior Research Analyst at SMC Global Securities, believes that participation in the buyback may be considered by eligible shareholders, particularly those who held shares on the record date and are looking to monetise a portion of their investment at a premium price.
“The buyback price of ₹1,260 per share provides an attractive exit opportunity if the prevailing market price remains below the offer price. However, investors should keep in mind that acceptance in a tender offer is based on entitlement and overall participation levels, meaning not all tendered shares may be accepted,” Srivastava said.
She noted that the company continues to maintain a strong position in the pharmaceutical sector with a diversified product portfolio, healthy cash flows, and ongoing growth opportunities. Therefore, long-term investors who remain positive on the company’s business prospects may choose to tender only a part of their holdings.
“The final decision should depend on an investor’s investment horizon, tax considerations, expected acceptance ratio, and outlook on the company’s future earnings growth and valuation,” she added.
Mahesh M Ojha, VP Research & Business Development at Kantilal Chhaganlal Securities, also suggested that investors consider tendering their shares in the buyback offer, as the offer price of ₹1,260 represents a significant premium over the current market price (CMP).
“The gap between the CMP and the buyback price translates into an upside potential of nearly 15%, making the offer attractive from a return perspective. Given this substantial premium, tendering shares in the buyback could be a prudent strategy for eligible shareholders looking to lock in gains,” Ojha said.
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