HCL Tech and Oil India announce share buybacks
Mar 21 2017 , New Delhi
The firm said it will buyback under 2.5 per cent of its fully paid-up equity shares outstanding. The buyback represents 16.39 per cent of its fully paid-up equity share capital and 13.6 per cent of its free reserves, the company said in a stock exchange filing.
With this move, HCL Tech has joined the growing roster of IT companies that have opted for the share buyback route to make use of huge piles of cash lying idle with them.
The sectors leader Tata Consultancy Services and US-based Cognizant had last month announced mega buyback offers to return surplus cash to shareholders.
IT companies have been under increasing pressure from investors to utilise the huge cash pile on their 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 $5.25 billion) at the end of December 2016. HCL Tech had $326 million, or Rs 2,214.5 crore, in cash and cash equivalents on its books in December 2016.
Last month, Cognizant had announced a $3.4 billion share buy back, bowing to pressure from activist investor Elliott Management.
TCS followed suit with a Rs 16,000 crore buyback offer, the 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.