Shares of National Institute of Information Technology (NIIT) slipped 15 per cent to Rs 74 in the intra-day trade on the BSE on Thursday on the back of heavy volumes as the stock goes ex-date for share buyback today. The stock of the IT training services company was trading close to its 52-week low price of Rs 70 per share.
On August 10, 2019, NIIT's Board had approved to buyback up to 26.8 million equity shares at Rs 125 per share for Rs 335 crore. Accordingly, October 18, 2019, was fxed as the record date for the purpose of determining the entitlement and the name of the equity shareholders who shall be eligible to participate in the buyback.
NIIT said the buyback would help to improve financial ratios, including return on equity and earnings per share, due to reduction in the equity capital, leading to increase in the long-term value for shareholders. In May 2019, NIIT divested its entire shareholding in NIIT Technologies for a consideration of Rs 2,020 crore.
In the past six months, the stock has underperformed the market by falling 30 per cent, as against a per cent decline in the S&P BSE Sensex.
At 11:10 am, NIIT was quoting 9 per cent lower at Rs 79, as compared to a 0.1 per cent rise in the benchmark index. The trading volumes on the counter more-than-doubled with a combined 1.32 million equity shares changing hands on the BSE and NSE.