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IT solutions company Mastek is set to buy back up to 32 lakh of its own equity shares at a 24 per cent premium to the stock’s closing price on Thursday of Rs 201.55.
The company will spend a maximum of Rs 54.5 crore at Rs 250 apiece, it said in a communication to the stock exchanges. Mastek’s board of directors had met on Thursday to finalise the offer.
The buyback plan will be implemented with the approval of the company’s shareholders by way of a special resolution through postal ballot, the company said.
Buyback offers are used by companies to reward shareholders by reducing the company’s equity base and shoring up its financial ratios, which eventually push up the market price of the company’s shares. Mastek currently has cash reserves of around Rs 250 crore, said Farid Kazani, Chief Financial Officer.
SEBI had tightened buyback norms this August by stipulating that companies cannot buy back more than 15 per cent of their equity capital through open market. Mastek’s offer size represents 14.92 per cent of the company’s paid-up capital and free reserves as on March 31, 2013.
Reacting to the development, the Mastek stock hit its 52-week high of Rs 213.85 on the BSE.
adith.charlie@thehindu.co.in
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