After a slow start, Reliance Industries Ltd (RIL)'s share buyback programme seems to have gathered pace with the company having acquired stocks worth Rs 1,481 crore since launch of the share repurchase offer in February. 

According to the information available with the bourses, Mukesh Ambani-led RIL that began a buyback programme of Rs 10,440 crore early this year, has so far purchased shares worth Rs 1,481.66 crore. This translates to about 14 per cent of the total amount earmarked for purchase of shares. 

Between February 14 and May 24, the country's second-most valued firm purchased 1.92 crore shares at an average price of Rs 771 apiece. 

Although, the buyback begun in February, it gained momentum in May as the company has picked up about 1.20 crore shares this month compared to 29.89 lakh shares in April. 

RIL had bought back 22.55 lakh shares in March and just 5.45 lakh shares in February, respectively. 

Market experts are of opinion that the oil and gas giant is buying back shares aggressively from the open market with an aim to shore up stock valuations. 

However, the buyback programme appears to have provided little respite to the stock price, which has fallen over seven per cent in May alone, underperforming the benchmark Sensex that has declined by six per cent during the period. 

RIL shares slipped to as low as Rs 692 on last Friday, which is much below the maximum price of Rs 870 per share fixed for buyback. 

Moreover, RIL touched its 52-week low of Rs 671 on May 8. The stock received a setback after credit rating agency Moody's downgraded RIL as credit negative following the downward revision in the company's assessment of natural gas reserve. 

"Reliance has underperformed the markets during last few years. It is not able to perform on the back of the falling output from KG-D6. The progress of work seems to be very slow. Another problem with the Reliance is that it is not able to use cash reserves in a very effective manner," Wellindia Vice- President Research Vivek Negi said. 

"Fundamentally, the company is still doing average. But there is no clarity on the future prospects of the company. Long-term investors may accumulate Reliance below Rs 700," he added. 

RIL's Rs 10,440-crore buyback offer could be the biggest ever in the history of Indian capital market. The buyback programme, which commenced on February 7, is scheduled to continue till January 19, 2013. 

In December, 2004, RIL had offered to buyback 10 per cent of its equity at Rs 570 per share. 

According to CNI Research Head Kishor Ostwal, the success of buyback offers depends on many factors like willingness to buy the proposed shares and premium sustainability. 

"In fact, many corporate houses failed to utilise the entire corpus targeted for the purpose in past and many firms even discontinued buying activities despite shares being available well below maximum buyback price," he added. 

RIL posted a 21 per cent decline in net profit at Rs 4,236 crore even though its revenues rose 17 per cent to Rs 85,182 crore in the quarter ended March 31, 2012. The quarterly numbers were hurt by weak refining margins and declining gas output from its offshore fields. 

The company's cash and bank balance stood at Rs 39,598 crore as of March, 2012. (PTI)