OREANDA-NEWS. March 29, 2011. Reliance Infrastructure Limited (RInfra) will commence the buy-back of its Equity Shares from April 5, 2011. RInfra had announced the buy-back of its outstanding equity shares for an aggregate amount of up to Rs.1,000 crore.

RInfra will buy-back shares up to a maximum price of Rs. 725 per equity share, representing a premium of over 47% to the 52 week low price of Rs. 493 per equity share, and a premium of approximately 11% to the last closing share price.

On consolidated basis, the book value of the Company is Rs. 860 per share as on December 31, 2010. The closing price on Friday was Rs. 651 per share representing that the stock is trading at a discount of approximately 24% to consolidated book value.

The Company has done three buy-backs till date for an aggregate amount of Rs. 923 crore and the current buy-back offer reflects more than 100% of the aggregate amount invested in three previous buy-back offers.

RInfra will buy-back shares on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), through open market purchases, from time to time.

The share buy-back will be made from the investments made by the Company in liquid and marketable securities and is expected to:

reduce short term volatility in the Company's share price;

deter speculative activity in the Company's shares;

send a strong signal to the capital markets on the perceived under-valuation of the Company's share price; and

reiterate the confidence of management in future growth prospects of the Company.

The shares purchased under the buy-back program will be extinguished, as required under SEBI guidelines, leading to a reduction in the Company's outstanding equity capital.

The proposed buy-back is expected to lead to the following benefits:

RInfra stock is trading at a discount of 24% to consolidated book value - reflecting significant and unique value opportunity

Reduction in the outstanding number of equity shares, and consequently, an increase in earnings per share (EPS);

Improvement in Return on Net Worth (current consolidated net worth is Rs. 22,110 crore) and other financial ratios;

RInfra's equity capital is Rs. 267.42 crore, (as at Feb 14, 2011) and its current market

capitalisation is over Rs. 17,500 crore (USD  3.89 billion).