NEW DELHI: Software services provider HCL Technologies on Wednesday said it will buy back shares at Rs 1,000 apiece, a 17 per cent premium over the current trading price of Rs 852.35 per share. The company is proposing an offer for buyback of equity shares for cash at a price of Rs 1,000 per equity share on a proportionate basis through tender offer process, it said in a regulatory filing.
Following the lead of domestic rivals Tata Consultancy Services (TCS) and Cognizant Technology Solutions Corp, the board of HCL Technologies has approved repurchase of 3.5 crore shares, representing 16.39 per cent and 13.62 per cent 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 March 31 2016, it added.
HCL said the Letter of Offer will be sent to the company’s equity shareholders on the record date of May 25. However, opening and closing dates of the buyback programme, which received shareholders’ approval last month, has not yet been announced.
IT companies have been under growing pressure from investors to reward shareholders through share buybacks or generous dividends.
In February, TCS had announced a mega buyback worth Rs 16,000 crore for 5.61 crore shares at Rs 2,850 apiece. It is currently underway. TCS’ rival Infosys has also announced its capital allocation policy to return up to Rs 13,000 crore this financial year through dividend and/or buyback.
Last year, hedge fund Elliot Management Corporation disclosed a stake in Cognizant and called on the company announce a buyback and start paying dividends. Eventually, the company announced a plan to return $3.4 billion over the next two years through buybacks and dividends.
Meanwhile, Indian firms had bought back shares worth Rs 28,290 crore till January 31, 2017 — an all-time high in any financial year.