Tech Mahindra Buyback – Review, Offer Details, Price, Dates, Size & more

In this article, we will discuss the Tech Mahindra Limited Buyback offer, buyback price, buyback size, Tech Mahindra Buyback record date, company financial, buyback necessity and its impact on the company.

Tech Mahindra Limited Buyback Details

Buyback TypeTender Offer
Buyback Opening Date March 25, 2019
Buyback Closing DateApril 5, 2019
Buyback Offer AmountRs. 19,55,57,50,000/-
Buyback No. of Shares2,05,85,000
Face ValueRs. 5/-
Date of Buyback ApprovalFebruary 21, 2019
Date of Public AnnouncementFebruary 23, 2019
Buy Back Price Rs. 950/-
Buy Back Premium18.22%

Tech Mahindra Buyback Opening and Closing Date

The starting and closing dates of this buyback are from March 25, 2019, to April 5, 2019.

Tech Mahindra Buyback Cash Offer

The Cash Offer to Buy-back up to 2,05,85,000 (Two crores five lakhs eighty-five thousand only) fully paid-up equity shares of the Company of face value of Rs. 5 each.

Tech Mahindra Buyback Record Date

The decided record date is Wednesday, March 6, 2019.

Tech Mahindra Buyback Price

At a price of Rs. 950/- (Rupees Nine Hundred Fifty only) per Equity Share.

Tech Mahindra Buyback Size

The Buyback is for an aggregate amount not exceeding Rs. 19,55,57,50,000(Rupees One Thousand Nine Hundred and Fifty-five Crores Fifty-seven Lakhs Fifty Thousand only).


Tech Mahindra Buyback Acceptance Ratio

Find profit & profit percentage based on various acceptance rate, The profit is calculated based on 1000 shares.

Acceptance RatioTotal Shares AcceptedBuyback PriceBuyback AmountProfitProfit%
20%
40%
60%
80%
100%

Profit is calculated from 12th May 2019 share price i.e. Rs.54.15 per share of Tech Mahindra Limited.

According to the above table, if a share owner applies for 1000 shares of Tech Mahindra Limited & gets 20% acceptance from the company, the owner of this 1000 shares will sell 200 shares @ Rs.56 per share & receive Rs.370 as profit amount & 0.68% profit percentage on selling these 200 shares back to the company.

Similarly, if the owner gets 60% acceptance of share from the company, the owner will sell 600 shares @ Rs.56 & receive a profit of Rs.1,110 @ 2.05% profit percentage.


Tech Mahindra Limited Buyback Overview

The Company, a part of the Mahindra Group, represents the connected world, offering innovative and customer-centric information technology experiences and solutions. The Company is a USD 4.9 billion company with presence across multiple countries across the globe, helping over 900 global customers, including Fortune 500 companies.

The Company’s convergent, digital, design experiences, innovation platforms and reusable assets connect across a number of technologies to deliver tangible business value and experiences to its stakeholders.


Company Finances – Tech Mahindra Limited

The salient financial information of the Company extracted from the audited consolidated financial statements for last three years being March 31, 2018, March 31, 2017 and March 31, 2016 and audited condensed consolidated interim financial statements for nine month period ended and as on December 31, 2018 prepared under IND-AS are given below:

(in Rs. million)

Key FinancialsDecember 31,
2018 (9M)
March 31,
2018
 March 31,
2017
 March 31,
2016
(Audited)(Audited)(Audited)(Audited)
Revenue from Operations2,58,4983,07,7292,91,4082,64,942
Other Income3,67114,1657,7764,394
Total Income2,62,1693,21,8942,99,1842,69,336
Total Expenses (excluding
interest & depreciation and
amortisation)
2,11,5162,60,6332,49,5642,22,236
Interest Cost1,0511,6241,286970
Depreciation and Amortisation8,58810,8509,7817,589
Profit Before Tax41,01448,78738,55338,541
Tax Expense (including Deferred
Tax)
9,00910,92610,0218,301
Share in JV’s/Associates
profit/(loss)
(383)1(23)26
Profit/ (Loss) for the period31,62237,86228,50930,266
-Profit/ (Loss) for Owners of
Company
31,65137,99828,12929,929
-Profit/ (Loss) for Minority
Interest
(29)(136)380337
Other Comprehensive Income1,602(2,190)8332,368
Total Comprehensive Income33,22435,67229,34232,634
– Total Comprehensive
Income for   Owners of
Company
33,13735,51929,09732,296
– Total Comprehensive
Income for Minority
Interest
87153245338
Paid-up Equity Share Capital4,4254,4174,3884,355
Reserves & Surplus2,03,4701,84,0111,59,9841,41,554
Networth2,07,8951,88,4281,64,3721,45,909
Total Debt, excluding working
capital loans
8,07814,4175,3202,854

Tech Mahindra Limited Buyback Dates

Date of the Board meeting held to approve the proposal for Buy-back of Equity SharesThursday, February 21, 2019
Date of publication of Public Announcement for the Buy-backMonday, February 25, 2019
Record Date for determining the Buy-back Entitlement and the Eligible ShareholdersWednesday, March 6, 2019
Buy-back opens on / Buy-back Opening DateMonday, March 25, 2019
Buy-back closes on / Buy-back Closing DateFriday, April 5, 2019
Last date of verification by Registrar to Buy-backThursday, April 11, 2019
Last date of intimation to the Stock Exchange regarding acceptance or non-acceptance of tendered Equity Shares by the Registrar and Manager to the Buy-backFriday, April 12, 2019
Last date of settlement of bids on the Stock ExchangeTuesday, April 16, 2019
Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / BrokerTuesday, April 16, 2019
Last date of extinguishment of Equity Shares bought backTuesday, April 23, 2019


Necessity of Tech Mahindra Limited Buyback

The Buyback is being undertaken to return to the equity shareholders, in an expedient, effective and cost-efficient manner, surplus cash which is in excess of the Company’s ordinary capital requirements and current investment plans. The Buyback is being undertaken for the following reasons:

  • The Buyback will help the Company to return surplus cash to its Shareholders holding Equity Shares broadly in proportion to their shareholding, thereby, enhancing the overall return to Shareholders;
  • The Buyback, which is being implemented through the Tender Offer route as prescribed under the Buyback Regulations, would involve allocating to the Small Shareholders the higher of number of shares entitled as per their holdings, or 15% of the number of shares to be bought back, reserved for the Small Shareholders. The Company believes that this reservation for Small Shareholders would benefit a large number of public shareholders, who would get classified as “Small Shareholder” as per Regulation 2(i)(n) of the Buyback Regulations;
  • The Buyback is expected to improve return on equity and earnings per share by reduction in the equity base, thereby leading to long term increase in Shareholders’ value; and
  • The Buyback gives an option to Shareholders holding Equity Shares of the Company, who can choose to participate and get cash in lieu of Equity Shares to be accepted under the Buyback offer or they may choose not to participate and enjoy a resultant increase in their percentage shareholding in the Company, post the Buyback offer, without additional investment.

Impact of Tech Mahindra Limited Buyback on the Company

We believe that the Buyback is not likely to cause any impact on the profitability or earnings of the Company, except to the extent of reduction in the amount available for investment, which the Company could have otherwise deployed towards generating investment income.

Assuming the response to the Buyback is to the extent of 100% from all the Eligible Shareholders upto their entitlement, the aggregate shareholding and the voting rights of the members of the promoter and promoter group of the Company, may increase to 35.96% post Buyback from the current pre Buyback shareholding of 35.87%, and the aggregate shareholding of the public shareholders in the Company may decrease to 64.04% post Buyback from the current pre Buyback shareholding of 64.13%.

The Company confirms that as required under section 68(2)(d) of the Companies Act, the ratio of the aggregate of secured and unsecured debts owed by the Company will be not more than twice the paid-up share capital and free reserves as on December 31, 2018 after the Buyback.

Salient financial parameters consequent to the Buyback based on the Company’s audited condensed standalone and consolidated interim financial statements as at December 31, 2018 are as under:

ParametersStandaloneConsolidated
Pre-BuybackPost-BuybackPre-BuybackPost- Buyback
Net worth (in Rs. million)2,14,8671,95,3112,07,8951,88,339
Return on Net worth (%)21.09%23.21%20.28%22.39%
Basic EPS (of Rs. 5 each)34.5535.4035.6536.59
Book Value per Share (Rs.)219.05203.38234.94217.90
P/E as per the latest audited
results
23.2222.6622.5021.92
Total Debt/ Equity Ratio0.000.000.110.12

 


Basis of Calculating Tech Mahindra Buyback Price

The Buyback Price has been arrived at after considering many factors, including, but not limited to, the trends in the volume weighted average market prices of the Equity Shares of the Company on the Stock Exchanges where the Equity Shares of the Company are listed, the net worth of the Company, price earnings ratio, impact on other financial parameters and the possible impact of Buyback on the earnings per Equity Share.

More on Tech Mahindra Buyback Price Calculation

Further, the Buyback Price of Rs. 950/- (Rupees Nine hundred and fifty only) per Equity Share represents:

  • A premium of 29.81% and 30.22% over the volume weighted average market price of the equity shares on BSE and NSE, respectively, during the three months preceding the date of intimation to the Stock Exchanges for the board meeting to consider the proposal of the Buyback, i.e. February 16, 2019 and
  • A premium of 19.18% and 19.24% over the volume weighted average market price of the Equity Shares on the BSE and on the NSE, respectively, during two weeks preceding the date of intimation to the Stock Exchanges for the Board Meeting to consider the proposal of the Buyback, i.e. February 16, 2019.

Source of Funds for the Buyback

The Buyback would be financed out of free reserves and/or such other sources as may be permitted by law through “Tender Offer” route and as required by the Buyback Regulations and the Companies Act, and on such terms and conditions as the Board may deem fit.

The Company shall transfer from its free reserves a sum equal to the nominal value of the equity shares bought back through the Buyback to the Capital Redemption Reserve Account and the details of such transfer shall be disclosed in its subsequent audited financial statements.

The Company has confirmed that the funds for the Buyback will be made available out of its internal accruals and not out of funds borrowed, if any, from banks and financial institutions.


Tech Mahindra Limited – Manager to the Buyback

Kotak Mahindra Capital Company Limited
Address: 27BKC, 1st Floor, Plot No. C-27, “G” Block, Bandra Kurla Complex,
Bandra (East), Mumbai – 400051
Phone: +91-22-4336-0128
Fax: +91-22-6713-2447
Contact Person: Mr. Ganesh Rane
Email: [email protected]
Website: www.investmentbank.kotak.com
SEBI Registration Number: INM000008704
Validity Period: Permanent
CIN:U67120MH1995PLC134050

Tech Mahindra Limited – Registrar to the Buyback

Link Intime India Private Limited
C-101, 247 Park, L.B.S. Marg, Vikhroli West Mumbai 400 083
Tel: +91 22 49186300
Fax: +91 22 49186195
Contact Person: Mr. Sumeet Deshpande
Email: [email protected]
Website: www.linkintime.co.in
SEBI Registration Number: INR000004058
Validity Period: Permanent
CIN: U67190MH1999PTC118368

Tech Mahindra Limited Contact Details

Company Contact Details
Tech Mahindra Limited
Corporate Identification Number (CIN): L64200MH1986PLC041370
Registered Office: Gateway Building, Apollo Bunder, Mumbai, Maharashtra, 400001
Tel.: 022-22021031; Fax: 022-22028780
Corporate Office: Plot No. 1, Phase III, Rajiv Gandhi Infotech Park, Hinjewadi, Pune
411 057
Tel.: 020-4225 0000, 020-6601 8100, Fax: 020-4225 0016
E-mail: [email protected] Website:
http://www.techmahindra.com
Contact Person: Anil Khatri, Company Secretary

 


Tech Mahindra Limited Buyback News

News 1 – Buyback PDF / Letter of Offer [Download]


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