eClerx Services Proposes ₹3,000 Million Share Buyback at ₹4,500 Per Share
eClerx Services Limited has proposed a share buyback of up to 666,666 equity shares (1.40% of total paid-up equity) at ₹4,500 per share through a tender offer. The buyback, valued at ₹3,000 million, represents 21.08% of the company's standalone paid-up capital and free reserves. The buyback price offers a premium over recent market prices, with promoters opting not to participate. Shareholder approval will be sought through a postal ballot from November 5 to December 4, 2023.
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eClerx Services Limited , a prominent business process management company, has announced a significant share buyback proposal, demonstrating its commitment to enhancing shareholder value. The company's Board of Directors has approved a buyback of up to 666,666 equity shares, representing 1.40% of its total paid-up equity share capital, at a price of ₹4,500 per share through a tender offer route.
Buyback Details
The proposed buyback, valued at up to ₹3,000 million, represents 21.08% of the company's aggregate paid-up equity share capital and free reserves based on standalone financials as of March 31, 2023. Here are the key details of the buyback:
| Particulars | Details |
|---|---|
| Maximum number of shares | 666,666 |
| Buyback price | 4,500.00 |
| Total buyback amount | 3,000.00 |
| % of paid-up capital and free reserves (Standalone) | 21.08 |
| % of paid-up capital and free reserves (Consolidated) | 13.80 |
Premium Offer
The buyback price of ₹4,500 per share represents a premium over recent market prices:
- 7.71% premium over the one-month volume-weighted average price on BSE
- 7.70% premium over the one-month volume-weighted average price on NSE
- 11.28% premium over the two-week volume-weighted average price on both exchanges
Shareholder Approval and Timeline
The company will seek shareholder approval for the buyback through a postal ballot. Key dates include:
- Voting period: November 5, 2023, to December 4, 2023
- Results announcement: December 5, 2023
Promoter Participation
Notably, the promoters and promoter group members of eClerx Services Limited have expressed their intention not to participate in the buyback. This decision may potentially increase the acceptance ratio for other shareholders.
Financial Position
The company's financial position supports this buyback initiative. As of March 31, 2023, eClerx Services reported:
- Standalone paid-up equity share capital and free reserves: ₹14,228.94 million
- Consolidated paid-up equity share capital and free reserves: ₹21,737.52 million
The proposed buyback amount falls within the statutory limit of 25% of the total paid-up equity share capital and free reserves.
Rationale for Buyback
eClerx Services Limited stated that the buyback aims to:
- Return surplus funds to shareholders
- Enhance overall shareholder value
- Improve return on equity
- Optimize the company's capital structure
Conclusion
This share buyback proposal demonstrates eClerx Services Limited's confidence in its business prospects and commitment to delivering value to its shareholders. The premium offer price and the non-participation of promoters may make this buyback attractive to public shareholders. However, investors should carefully consider their own financial situations and objectives before deciding to participate in the buyback.
As the company awaits shareholder approval and regulatory clearances, market participants will be watching the developments surrounding this corporate action.
Historical Stock Returns for eClerx Services
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.11% | +0.45% | +17.91% | +90.21% | +58.04% | +952.35% |
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