Crompton Greaves sulks

Crompton Greaves is down in the morning trades today, currently down almost 3% at Rs.86.90, with an intra day low at Rs.85.25. Volumes are pretty muted at 74,000 shares.

The stock is in the red after the company announced on Friday, post market closing that it had to postpone its proposed buyback, which was scheduled to happen today. This has happened after SEBI suggested some amendments and the company was in the process of incorporating these changes.

The company is to buy back shares at a maximum price of Rs.125/share but now under the revised norms on buy back, the company needs to an escrow account towards security for performance with an amount equivalent to at least 25% of the amount earmarked for buy-back. It will also have to ensure that 50% of the funds earmarked for buyback is utilised by the company as against the existing 25%, failing which amount in the escrow account would be forfeited subject to a maximum of 2.5% of the total amount earmarked.