Shares of Indiabulls Real Estate were locked in 5 percent upper circuit at Rs 43.40 intraday after its board on October 11 approved a Rs 500-crore share buyback proposal.

On the BSE, there were pending buy orders of 285,309 shares, with no sellers available at 1338 hours.

The real estate company informed exchanges that its board of directors had approved a proposal of Rs 500 crore of share buyback.

The company said it would buyback up to 5 crore fully paid-up equity shares, representing approximately 11 percent of its total existing paid-up equity capital at Rs 100 per share through the tender offer route.

The buyback price is at a significant premium of 141 percent over October 10 closing value of Rs 41.35.

The buyback, which is more than 10 percent of the company’s paid-up equity capital and free reserves, will be subject to the approval of shareholders, Indiabulls Real Estate said.

The stock has declined more than 62 percent in the last three months amid reports of corporate governance issues and worries over Indiabulls Group’s plan to merge Indiabulls Housing Finance and Lakshmi Vilas Bank. The Reserve Bank of India recently rejected the merger proposal.

[“source=moneycontrol”]