Home >Markets >Stock Markets >Eclerx Services jumps; board approves share buyback proposal

MUMBAI: Shares of Eclerx Services surged on Monday after the company's board approved a share buyback proposal.

The board has approved the buy-back of company's equity shares for an aggregate amount not exceeding 1,095 million, at a price not exceeding 550 apiece.

The buy-back price is 15.47% premium to the Friday's close of 476.30.

At 1245 pm, the Eclerx Services stock traded at 502.40, up 5.2% from its previous close, while the benchmark Sensex was up 1.2% at 36,463.57. The stock had touched a high of 527.50 earlier in the day.

As of 31 March, promoters held 50.76% in the company, while mutual funds held 21.11%, followed by foreign portfolio investors with 17.56% and the public shareholding at 5.96%.

During the financial year 2019-20, Eclerx had concluded buy-back of 1.75 million equity shares of 10 each, at price of 1,500 apiece, aggregating 262 crore.

The primary objective of a share buy-back is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better price to earnings multiple.

Since the beginning of 2020, Eclerx Services' shares have declined 9.8% compared to a 11.5% fall in Sensex. From its March lows, the stock has gained 55%.

For the quarter ended March, Eclerx Services reported a 6.4% year-on-year fall in net profit to 55.40 crore while net sales fell 3.9% to 350.93 crore.

Eclerx Services Ltd provides knowledge process outsourcing (KPO) services to global companies providing data management, analytics solutions and process outsourcing services to a host of global clients through a network of locations in India and abroad.

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