Mumbai, Oct. 22: Piramal Healthcare today said it would buy back shares at a price of Rs 600 apiece to reward its shareholders.

In May, the Ajay Piramal group company had sold its domestic formulation business to Abbott for $3.8 billion.

Last month, the company had announced the closure of this deal and received $2.2 billion as upfront payment.

In a separate deal, Piramal Healthcare had sold its stake in subsidiary Piramal Diagnostic Services to Super Religare Laboratories for Rs 600 crore. The deal was closed in August.

The company was looking to reward its shareholders either through a special dividend or a share buyback.

At its board meeting today, the directors approved the buyback proposal as they felt it was a more tax-efficient way of maximising value to shareholders.

The buyback will be done for a maximum of 4.18 crore shares at a price of Rs 600 apiece, which represents a premium of 19 per cent over the average share price for the last three months.

It will entail a cash outflow of up to Rs 2,510 crore.

The firm is expected to complete the buyback programme by February.

The company said the buyback would be done on a proportionate basis through the “tender offer” route as prescribed by the Securities and Exchange Board of India.

Though talks of the impending share buyback had sent the Piramal shares soaring in the past few sessions, the announcement today led to profit booking in the scrip.

On the Bombay Stock Exchange, the scrip ended lower by over 5 per cent at Rs 515.35.

For the quarter ended September 30, the company has posted a net profit of Rs 12,540 crore compared with Rs 106.27 crore during the corresponding period of the last fiscal.

The performance comes on the back of the net exceptional income earned by selling the domestic formulation business.

Net sales stood at Rs 752.01 crore against Rs 999.99 crore in the year-ago period.

Total operating income on consolidated basis fell 25 per cent to Rs 750 crore.