In a notice to Pakistan Stock Exchange, National Foods has stated that its has bought back its shares valuing Rs. 128 million. The statement reads as below:
In connection with our letter reference No. NFL/Corp/2020/55 dated September 30, 2020, wherein we had communicated the decision of ATC Holdings, the holding company of National Foods Limited, regarding further equity investment of up to Rs. 300 million by way of acquiring ordinary shares of National Foods Limited from the open market, during the next 12 months.
Accordingly, ATC Holdings out of Rs 300 million has already made an equity investment of around Rs. 128 million in this regard.
Further investment to the tune of Rs. 172 million shall be made by ATC Holdings during the period of next 12 months at the prevailing market prices of shares of National Foods Limited. This decision has been approved by the shareholders of ATC Holdings in the Extra Ordinary General Meeting (EOGM) held on October 8, 2021.
At an average price of Rs.225/share, National Foods is expected to have bought back roughly 550,000 of its own shares, which is a very low percentage of its free float.
The motive behind buying back remained unclear as buy back low fraction of shares doesn’t serve any tangible purpose. However, it is an indication to the market that Company is confident of its future and earnings are expected to increase going onwards.