BUSINESS

HCL Tech Announces ₹3,500 Crore Share Buy-back At 17% Premium

Buy-back offer price is about 17% higher than the current trading price.

24/05/2017 6:38 PM IST | Updated 24/05/2017 6:38 PM IST
Shilpa Anand / Reuters

NEW DELHI -- Country's fourth largest software services firm HCL Technologies on Wednesday said it will buy-back shares at ₹1,000 apiece, a 17% premium over current trading price.

The company is proposing an offer for buy-back of equity shares for cash at a price of ₹1,000 per equity shares on a proportionate basis through tender offer process, HCL Technologies said in a regulatory filing.

The buy-back size is ₹3,500 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.

Buy-back offer price is about 17% higher than the current trading price of the stock at ₹852.35 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 buy-back 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 Rs 16,000- crore mega buy-back offer. It is currently under way.

TCS rival, Infosys has also announced its capital allocation policy to return up to ₹13,000 crore this financial year through dividend and/or buy-back.

Earlier this year, Cognizant announced a $3.4 billion share buy-back, bowing to pressure from activist investor Elliott Management Corp.

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