Tech Mahindra Approves Rs 1,956-Crore Share Buyback
Tech Mahindra Ltd. will buy back as much as Rs 1,956 crore worth of its shares, the first by the country’s fifth-largest software exporter.
The company will repurchase 2.06 crore shares, or 2.1 percent of equity, at Rs 950 apiece, according to its regulatory filing. The buy back price is at a 17 percent premium to Wednesday’s close of Rs 811.75 apiece, and higher than the all-time high of Rs 840 the stock clocked today.
The company chose to buyback 10 percent of its shareholder equity capital through the tender route as it wanted to start off in a manner that is equitable and proportionate, Manoj Bhat, chief financial officer at Tech Mahindra told BloombergQuint. “We wanted to make sure it is rewarding for the shareholders participating in the buyback.”
Tech Mahindra had net cash of Rs 6,520 crore as of December last year. The company’s shareholder’s equity was Rs 21,306 crore.
Tech Mahindra is focussing on managing the mergers and acquisitions and also increasing payout from the last two to three years, Bhat said, adding that M&A would continue to remain a core part of the company’s strategy.
Buyback offers have become a popular route for Indian companies flush with cash to reward shareholders. Technology companies like Tata Consultancy Services Ltd., Infosys Ltd., Wipro Ltd. and HCL Technologies Ltd. have carried out buybacks recently.
Shares of the information and technology company were up 2.2 percent at Rs 829.85 apiece in mid-day trading.