Hinduja Global Solutions Ltd. announced a share buyback worth up to Rs 1,000 crore, days after the offshoring services provider’s dividend left investors disappointed.
The board approved a repurchase of up to 25% of the paid-up capital, and reserves and surplus allowed under the regulations, according to the company’s statement to exchanges.
The quantum of the buyback, price and timing will be decided after the bonus issue is completed in March, and audited financials are available in the April-June quarter, the company said.
The buyback to reward shareholders is aimed at soothing investor concerns after the company’s dividend of Rs 150 per share and the 1:1 bonus issue plan triggered a 20% plunge for the stock on Jan. 7. The total outgo was Rs 313.2 crore compared to Rs 8,000 crore the company said it would receive from the sale of its healthcare division.
According to the company’s statement, the buyback amount of Rs 1,000 crore is up to 25% of its paid-up capital and free reserves. That implies a total paid-up, surplus and reserves worth Rs 4,000 crore as of March. That’s half the inflow from the deal.
The board also approved a related-party transaction to acquire the listed cable distribution business of the group NXTDIGITAL Ltd. in an equity-swap deal. The swap ratio is subject to the valuation report.
The proposed acquisition fits with the company’s strategy of becoming a digital company, the company said in a statement.
NXTDIGITAL had a market cap of Rs 1,356 crore as on Jan 14.
The deal would involve acquiring digital and media businesses comprising broadband, digital cable television, content syndication and teleshopping.