HCL Technologies proposes share buyback at 17% premium for Rs3,500 crore
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New Delhi: India’s fourth largest software services firm HCL Technologies on Wednesday said it will buyback shares at Rs1,000 apiece, a 17% premium over current trading price.
The company is proposing an offer for buyback of equity shares for cash at a price of Rs1,000 per equity share on a proportionate basis through tender offer process, HCL Technologies said in a regulatory filing.
The buyback size is Rs3,500 crore, representing 16.39% and 13.62% of the aggregate of the fully paid-up equity share capital and free reserves as per the standalone and consolidated audited accounts of the company for the financial year ended 31 March 2016 , it added.
Buyback offer price is about 17% higher than the current trading price of the stock at Rs852.35 per share.
HCL said Letter of Offer will be to equity shareholders of the company as on record date of 25 May. Opening and closing dates of buyback programme, which received shareholder approval last month has not yet been announced.
The Indian IT companies have been under pressure to return excess cash on their books to shareholders through generous dividends and buybacks.
Earlier this month, India’s largest software services firm Tata Consultancy Services (TCS) announced its Rs16,000- crore mega buyback offer. It is currently under way.
TCS rival, Infosys has also announced its capital allocation policy to return up to Rs13,000 crore this financial year through dividend and/or buyback.
Earlier this year, Cognizant announced a $3.4 billion share buyback, bowing to pressure from activist investor Elliott Management Corp.