The board of Tech Mahindra on Thursday approved a buyback of up to 20.5 million shares worth Rs1,956 crore at Rs950 per share. The record date for the same is 6 March, the company said in a release to exchanges, CNBC-TV18 reported.
The per share buyback price represents a premium of nearly 17 per cent compared to the previous day’s closing price on the NSE.
Manoj Bhat, CFO of Tech Mahindra, said the company will adopt a dividend plus buyback strategy.
"We will conduct buybacks on an annual basis as done by our peers in the industry. It is tax efficient and we do not want excess cash with the company," Bhat said, adding that the IT major will still hold on to some cash for future acquisitions, as "this is a core feature of our growth strategy."
“We would not like to retain too much excess cash in the company and in line with that the board will consider the quantum of dividend but we will go for dividend plus buyback kind of strategy into the future based on the needs of the business,” said Bhat.
"It is basically answering all the questions and worries and concerns in one go. It answers that there will not be any big-bang acquisition right now for the next few quarters at least and it also says that we are concerned about returning money to the shareholders in line with other IT companies," CNBC-TV18 quoted him as saying.
Bhat did not clarify whether promoters will participate in this process.