HCL Technology board clears up to ~40-bn share buyback plan

After Tata Consultancy Services (TCS), HCL Technologies, India’s fourth-largest IT services company, has also announced a share buyback programme. The Noida-headquartered company on Thursday said it had received its board's approval to conduct a share buyback of up to 36.3 million equity shares worth up to ~40 billion.

The buyback price of ~1,100 per share is at around 9 per cent premium over its current market price of ~1,010 at NSE at the close of trading session on Thursday. Currently, the promoters’ holding in the company stands at 60 per cent. “The board has approved the buyback of up to 36.3 million equity shares of the company representing 2.61 per cent of the fully paid-up equity shares at a price of ~1,100 per share payable in cash for an aggregate amount not exceeding ~40 billion," the company said in a regulatory filing.

The repurchase programme is proposed to be made from the shareholders of the company on a proportionate basis, it added.

This is the second consecutive year that HCL Technologies has announced a buyback of shares. The IT firm in May last year had bought back ~35 billion worth of shares at ~1,000 apiece. In June this year, the TCS board had approved a buyback programme of ~160 billion at ~2,100 per share, as part of the company's initiatives to distribute available surplus cash among shareholders.

Apart from TCS and HCL Technologies, Infosys, the country's second-largest software services firm, came out with such an offer last year to repurchase ~130 billion worth shares.

Wipro had also repurchased ~110 billion of shares during the last financial year. Infosys in its last annual general meeting had also indicated that the company would consider buyback of shares in coming quarters as part of its capital allocation policy.