INSUBCONTINENT EXCLUSIVE:
NEW DELHI: HCL Technologies dropped over 2 per cent on Friday following the announcement of its much-awaited share buyback.
The board of the
third-largest IT firm on Thursday approved a share buyback of up to Rs 4,000 crore, which is higher than Rs 3,500 crore offer it came out
The buyback size amounts to 38 per cent of the company's Rs 10,300 crore cash balance and 11 per cent of its net worth.
The buyback price
at Rs 1,100 is much in line with expectations
But the stock fell 2.3 per cent to hit a low of Rs 982.15 on the BSE.
TCS, Infosys, Wipro and HCL Technologies all announced buybacks last
Brokerage Motilal Oswal noted that regulation does not allow for a subsequent buyback within a period of one year from the date of the
closure of the preceding buyback offer
Hence, TCS and now HCLT have considered the next round of buyback now.
"The buyback would take the amount returned to shareholders to 40 per
cent on our FY19 PAT estimate
Even in FY18, HCL paid out 40 per cent of PAT in the form of buyback, but reduced its dividend to 13 per cent, keeping the total payout
The same can be expected this year too," the brokerage said.
