The share buyback issue of the midcap IT services provider NIIT Technologies opens on May 29.
The board of directors had approved the proposal of buyback of shares on December 23 last year and the same had received a nod from shareholders on February 15, 2020.
The record date for determining the eligibility of equity shareholders to participate in the buyback was March 12 and the stock traded ex-buyback with effect from March 11.Here are 10 key things to know about the share buyback:
- The company will buyback up to 19,56,290 fully paid equity shares (representing 3.13 percent of total issue and paid up equity shares) of a face value of Rs 10 each from the eligible shareholders as per the record date, on a proportionate basis.
2. The company will buyback shares by way of a tender offer route through the stock exchange mechanism for cash at a price of Rs 1,725 per share, which was 17 percent premium to the closing price on December 16 last year.
"We feel NIIT Tech share buyback offer fails to impress investors with offer price below market expectations Rs 1,725 per share," Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.
3. The IT company proposed to buyback Rs 337.46 crore worth of shares through the buyback offer.
4. The buyback issue will open on May 29 and the closing date will be June 11.
The last date to receive completed Tender Forms and other specified documents including physical share certificates by the registrar will be June 13 (by 17 hours IST), while the last date for settlement of bids on the stock exchange will be June 22.
The last date for extinguishment of equity shares will be June 29.
5. The company has dispatched letter of offer electronically to all its eligible shareholders holding shares as on record date, by May 21. The letter of offer along with Tender Form is available on the website of company, manager and registrar of the buyback issue. The company had received extension twice for dispatching the letter of offer and tender form due to COVID-19-led nationwide lockdown.
6. The buyback size represented 20.23 percent and 15.66 percent of the aggregate paid-up share capital and free reserves as per the audited standalone and consolidated financial statements of the company respectively, for the financial year ended March 31, 2019 and is within the statutory limits of 25 percent of the aggregate paid-up share capital and free reserves.
7. The aggregate shareholding of the promoter - Hulst B V - was 70.10 percent as on the date of the public announcement, i.e. February 17.
Under the Tender Offer route, the promoter has an option to participate in the buyback. In this regard, the promoter has expressed its
intention in December last year to participate in the buyback issue.
Assuming full response to the buyback, the aggregate shareholding of the promoter after the completion of the buyback will increase to 70.41 percent of the post-buyback total paid-up equity share capital, from 70.10 percent now, while the public shareholding would be 29.59 percent (decline from 29.90 percent currently).
If none of the public shareholders participate and only the promoter participates beyond its buyback entitlement, promoter shareholding may reduce from 70.10 percent to 69.13 percent of the total equity share capital of the company.
8. The buyback entitlement ratio for small shareholders is 5 equity shares for every 16 equity shares held on the record date and all other eligible shareholders is 1 equity share for every 37 equity shares held.
9. Eligible Shareholder(s) who intend to participate in the buyback will be required to approach their respective seller member (along with the complete set of documents for verification procedures) and have to ensure that their bid is entered by their respective Seller Member or broker in the electronic platform to be made available by BSE before the buyback closing date.
In case any eligible shareholder has submitted equity shares in physical form for dematerialization, such equity shareholders should ensure that the process of getting the equity shares dematerialized is completed well in time so that they can participate in the buyback before buyback closing date.
10. JM Financial is the manager for the buyback and the registrar is Link Intime India.