Tech Mahindra announces buyback of up to 2.06 cr shares

The board of Tech Mahindra today approved a share buyback proposal of up to 2.06 crore shares at a price of Rs 950, not exceeding Rs 1,956 crore. It has set March 6 as the record date.

The company said that the offer comprises 2.10% of the total paid-up equity capital of the company. The technology company has set March 6 as the record date.

This makes Tech Mahindra the third tech company to announce a buyback. Earlier this year, Infosys had announced a buyback offer of Rs 8,260 crore. The board of Persistent Systems too had approved a buyback offer of up to Rs 225 crore in January this year.

In a note, Mahesh Babu of Centrum said, “The buyback is 15% above CMP though the quantum of buyback is below our estimates. Tech Mahindra has net cash of Rs 65.2 bn as of Q3FY19 and we expected the company to spend Rs 35 bn for the buyback. We believe that buyback will not add much to institutional investors.”