The Board of HCL Technologies will meet next week to consider stock buyback, joining the growing roster of IT companies that have opted for the route to make use of huge piles of cash lying idle with them.
The sector's leader Tata Consultancy Services and US-based Cognizant had last month announced mega buyback offers to return surplus cash to shareholders.
"A meeting of the Board of Directors of the company will be held on Monday, March 20, 2017 to consider a proposal for buyback of the equity shares of the company," HCL Technologies said in a filing to the BSE.
IT companies have been under increasing pressure from investors to utilise the huge cash pile on books either through share buyback or generous dividend.
TCS had Rs 43,169 crore in cash reserves, while Infosys had liquid assets, including cash and cash equivalents and investments worth Rs 35,697 crore (about USD 5.25 billion) at the end of December 2016.
HCL Tech had USD 326 million or Rs 2,214.5 crore in cash and cash equivalents on its books in December, 2016.
Last month, Cognizant had announced USD 3.4 billion share buy back, bowing to pressure from activist investor Elliott Management Corp.
TCS followed suit with a Rs 16,000 crore buyback offer, largest in Indian corporate history.
Infosys too has been under pressure to make a similar offer. While it is yet to make any announcements, Infosys has sought shareholders approval to change the company's Articles of Association that includes a provision for buyback.
Share buybacks typically improve earnings per share and return surplus cash to shareholders while also supporting share price during periods of sluggish market condition.
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