The board of Emami Ltd has announced a buyback of shares at a price up to Rs 300 apiece and declared an interim dividend of Rs 2 per share.

It would spend up to Rs 191.99 crore, which represents 9.94 per cent of the free reserves of the Calcutta-based FMCG maker.

The indicative maximum number of equity shares proposed to be bought back at the maximum buyback size and maximum buyback price would be 63,99,810 shares, representing 1.41 per cent of the equity capital of the company.

The Emami stock closed at Rs 172.65 on the BSE, down 8.58 per cent, or Rs 16.20. Given the price range, the company may be able to buy more shares than it envisaged.

“The buy back of shares is a means to reward shareholders. A separate window will be opened to submit willing shareholders to tender their shares. The buyback will continue for six months,” Mohan Goenka, director of Emami, said.

Market sources say the company plans to buy shares at a price higher than the market to offer better value as it believes that the fair price of the Emami stock could not be less than Rs 300 apiece.

Public shareholders hold a 47.26 per cent stake in Emami. Post buyback, at the highest price, public shareholding will fall to 46.51 per cent. Sources said promoters may use the dividend income to reduce the leverage of the shares.