Apollo Tyres to buy back Rs122-crore equity

India's largest commercial vehicles tyre-maker, Apollo Tyres, yesterday said it was buying back of equities worth Rs122 crore in the open market. The company's board of directors has approved a proposal to buy back 67 lakh equity shares from the open market at a maximum price of Rs25 each, the company said in a filing with the BSE.

''In the present day context, we feel that the prevailing share quotes are underpriced and do not reflect the true value of the company or the inherent strengths of Apollo Tyres, both for the short and the long term,'' Apollo Tyres chairman and managing director Onkar S Kanwar said.

''This is an opportunity for us to enhance value for our shareholders,'' Kanwar added.

ICICI Securities has been appointed as the merchant banker for the offer.

The maximum buy back price of Rs25 a share represents a large 34.4 per cent premium over the current market price of about Rs18.6 a share. The size of the deal constitutes around 10 per cent of the paid up capital and free reserves of the company as of 31 March 2008.

The buyback process will commence once all regulatory approvals have been obtained and will be completed within 12 months. The buyback announcement did not have any appreciable impact on the price of Apollo shares.