Mid-size IT services firm MindTree said it would look at share buyback plan, joining larger firms such as TCS, Infosys, HCL. The company has informed the BSE the proposal for a buyback would be taken up at the Board meeting on June 28.
"...a meeting of the Board of Directors of the Company will be held on June 28, 2017 to inter-alia, consider the proposal to buyback the fully paid-up equity shares of the Company. Further, pursuant to Company's Code for Prevention of Insider Trading, the Trading Window of the Company will be closed from June 26, 2017 to June 30, 2017 (both the days inclusive) for the Designated Persons and others," said the Bengaluru-based company in a filing.
Mindtree has a market cap of Rs 8,749 crore and its share price closed Rs 1.45 or 0.28 per cent up at Rs 520.70 on the BSE on Thursday.
Analysts say the company might consider a token buyback of shares, which could be worth a small percentage of the market cap.
IT services companies have started opting for share buyback as they see increased shareholder activism due to lesser return on IT stocks. It started off when Cognizant in February this year approved Elliott Management's proposal for a share buyback and announced that it would return $3.4 billion over two years through buyback and dividend.
The country's biggest IT services firm Tata Consultancy Services announced a buyback of shares worth Rs 16,000 crore to repurchase 56.1 million shares (2.85 per cent of its equity) at Rs 2,850 each. This was for the first time TCS announced a buyback ever since the company got listed and the biggest in Indian capital market. HCL Technologies announced a buyback of shares in March after TCS.
Wipro had announced a buyback worth Rs 2500 crore last year and the company chief strategy officer Rishad Premji said that the company might valuate options of buyback and special dividends.