HCL Tech slips 2% after board approves share buyback proposal

The stock slipped 2.3% to Rs 982 after the company said it had received its board's approval to conduct a share buyback of up to 36.3 million equity shares worth up to Rs 40 billion.

Shares of HCL Technologies have slipped 2.3% to Rs 982 per share on the BSE in otherwise firm market after the company said it had received its board's approval to conduct a share buyback of up to 36.3 million equity shares worth nearly Rs 40 billion. The company made announcement on Thursday after market hours.

The buyback price of Rs 1,100 per share is at around 9% premium over its Thursday’s closing market price of Rs 1,005 at BSE. Currently, the promoters’ holding in the company stands at 60%.

“The board has approved the buyback of up to 36.3 million equity shares of the company representing 2.61% of the fully paid-up equity shares at a price of Rs 1,100 per share payable in cash for an aggregate amount not exceeding Rs 40 billion," the company said in a regulatory filing.

The buy-back is proposed to be made from the shareholders of the Company on a proportionate basis, through the “tender offer” route, 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 Rs 35 billion worth of shares at Rs 1,000 apiece.

Thus far in the calendar year 2018, HCL Technologies (up 13%) had underperformed its peers TCS (up 46%) and Infosys (25%).

At 09:37 am; the stock was trading 1.6% lower at Rs 989 on the BSE, as compared to 0.51% rise in the S&P BSE Sensex. A combined 1.8 million shares changed hands on the counter on the BSE and NSE.