HCL Tech announces Rs3,500-cr share buyback at 17% premium

HCL Technologies, India's fourth largest software services firm, today announced a Rs3,500-crore buy-back of shares at Rs1,000 apiece, at a 17 per cent premium over the current trading price of Rs852.35 a share.

The company is proposing an offer to buyback equity shares for cash at a price of Rs1,000 apiece on a proportionate basis through tender offer, HCL Technologies said in a regulatory filing.

The Rs3,500 crore buyback represents a 16.39 per cent of the aggregate fully paid-up equity share capital and 13.62 per cent of the company's free reserves, as per the standalone and consolidated audited accounts of the company for the financial year ended 31 March 2016.

HCL said the letter of offer will be made to equity shareholders of the company as on record date of 25 May. It did not, however, reveal the opening and closing dates of the buyback programme, which received shareholder approval last month.

HCL, like its bigger peers 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 Rs16,000-crore buyback offer, while Infosys announced a capital allocation policy to return up to Rs13,000 crore this financial year through dividend and/or buyback.

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