Vakrangee will invest for organic business growth, technology and R&D, training infrastructure, brand building initiatives, and contingency fund.
IT firm Vakrangee shares continued to hit upper circuit for second consecutive session on Monday, after the company announced capital allocation policy, saying it is debt free company.
Before the recovery, the stock had fallen 62 percent in nine straight sessions on media reports that company came under SEBI scanner for alleged share price, volume manipulation, but the company clarified that it has not received any communication either from stock exchanges or Sebi.
To soothe investors’ sentiment, the board of directors have approved capital allocation policy, saying total available cash balance is Rs 1,372 crore as of December 2017.
"Of which, the company will reinvest Rs 122 crore in business and the balance amount will be distributed to shareholders through dividend payout (Rs 250 crore) and share buyback (Rs 1,000 crore)," it said.
As far as reinvestment is concerned, Vakrangee will invest for organic business growth, technology and R&D, training infrastructure, brand building initiatives, and contingency fund.
"One of the key factors considered while creating capital allocation policy is that currently it is a debt free company and does not plan to raise any debt in the near future," Vakrangee said.At 12:40 hours IST, the share price was locked at 5 percent upper circuit at Rs 212.10 on the BSE and there were pending buy orders of 5,075,360 shares, with no sellers available.