After TCS, now HCL Technologies to consider share buyback on July 12

HCL Technologies Ltd.

HCL Technologies, one of the largest software services exporters, is going to consider share buyback later this week.

"A meeting of the board of directors of the company is scheduled to be held on July 12 to consider a proposal for buy-back of the equity shares of the company," the IT services company said in its filing.

The share buyback was in accordance with the applicable provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998, it added.

Last month, its peers Tata Consultancy Services also announced a mega Rs 16,000 crore share buyback while Infosys completed its Rs 13,000-crore share buyback last year.

Buyback is a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than market price. When it buys back, the number of shares outstanding in the market reduces.

Buybacks can be carried out in two ways:

1: Shareholders may be presented with a tender offer whereby they have the option to submit (or tender) a portion or all of their shares within a certain time frame and at a premium to the current market price. This premium compensates investors for tendering their shares rather than holding on to them.

2: Companies buy back shares on the open market over an extended period of time.

The stock price closed at Rs 961.25, up Rs 15.85, or 1.68 percent on the BSE.