Hyderabad (Telangana) [India], Nov 15 (ANI): Engineering products and solutions company Pennar Industries on Friday said its board of directors has approved buyback of fully paid-up equity shares of face value of Rs 5 at a price not exceeding Rs 45 per equity share for an aggregate amount not exceeding Rs 40 crore.

This is payable in cash from the open market route through the stock exchange mechanism under the Buyback Regulations and the Companies Act. The maximum buyback size represents 6.14 per cent and 6.16 per cent of aggregate of the company's paid-up equity capital and free reserves.

Pennar said the buyback will create long term value to shareholders and not likely to cause any material impact on the profitability or earnings of the company.

"The share buyback will reduce the outstanding number of equity shares and consequently improve, over a period of time, earnings per share and key return ratios like return on net worth, return on assets etc and will help effectively utilise available cash," it said in a statement.

The promoters or their associates will not deal in the shares or other specified securities of the company in the stock exchange or off-market, including inter-se transfer of shares during the period from the date of board approval till the closing of buyback.

The company said that maximum buyback size does not include any other expenses incurred or to be incurred like filing fees payable to SEBI, stock exchanges such as securities transaction tax, stamp duty, income tax and any other expenses incurred.

Pennar's portfolio has more than 1,000 precision-engineered products, 2,500 tools and dyes, over 600 customers and 8 manufacturing plants located at Patancheru, Sadashivpet, Isnapur, Velchal and Mallapur near Hyderabad, Chennai in Tamil Nadu and Tarapur in Maharashtra.