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 Type||Tender Offer|
|Buyback Opening Date||March 25, 2019|
|Buyback Closing Date||April 5, 2019|
|Buyback Offer Amount||Rs. 19,55,57,50,000/-|
|Buyback No. of Shares||2,05,85,000|
|Face Value||Rs. 5/-|
|Date of Buyback Approval||February 21, 2019|
|Date of Public Announcement||February 23, 2019|
|Buy Back Price||Rs. 950/-|
|Buy Back Premium||18.22%|
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 Ratio||Total Shares Accepted||Buyback Price||Buyback Amount||Profit||Profit%|
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 Financials||December 31,|
| March 31,|
| March 31,|
|Revenue from Operations||2,58,498||3,07,729||2,91,408||2,64,942|
|Total Expenses (excluding|
interest & depreciation and
|Depreciation and Amortisation||8,588||10,850||9,781||7,589|
|Profit Before Tax||41,014||48,787||38,553||38,541|
|Tax Expense (including Deferred|
|Share in JV’s/Associates|
|Profit/ (Loss) for the period||31,622||37,862||28,509||30,266|
|-Profit/ (Loss) for Owners of|
|-Profit/ (Loss) for Minority|
|Other Comprehensive Income||1,602||(2,190)||833||2,368|
|Total Comprehensive Income||33,224||35,672||29,342||32,634|
|– Total Comprehensive|
Income for Owners of
|– Total Comprehensive|
Income for Minority
|Paid-up Equity Share Capital||4,425||4,417||4,388||4,355|
|Reserves & Surplus||2,03,470||1,84,011||1,59,984||1,41,554|
|Total Debt, excluding working|
Tech Mahindra Limited Buyback Dates
|Date of the Board meeting held to approve the proposal for Buy-back of Equity Shares||Thursday, February 21, 2019|
|Date of publication of Public Announcement for the Buy-back||Monday, February 25, 2019|
|Record Date for determining the Buy-back Entitlement and the Eligible Shareholders||Wednesday, March 6, 2019|
|Buy-back opens on / Buy-back Opening Date||Monday, March 25, 2019|
|Buy-back closes on / Buy-back Closing Date||Friday, April 5, 2019|
|Last date of verification by Registrar to Buy-back||Thursday, 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-back||Friday, April 12, 2019|
|Last date of settlement of bids on the Stock Exchange||Tuesday, April 16, 2019|
|Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / Broker||Tuesday, April 16, 2019|
|Last date of extinguishment of Equity Shares bought back||Tuesday, 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:
|Net worth (in Rs. million)||2,14,867||1,95,311||2,07,895||1,88,339|
|Return on Net worth (%)||21.09%||23.21%||20.28%||22.39%|
|Basic EPS (of Rs. 5 each)||34.55||35.40||35.65||36.59|
|Book Value per Share (Rs.)||219.05||203.38||234.94||217.90|
|P/E as per the latest audited|
|Total Debt/ Equity Ratio||0.00||0.00||0.11||0.12|
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
Contact Person: Mr. Ganesh Rane
Email: [email protected]
SEBI Registration Number: INM000008704
Validity Period: Permanent
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]
SEBI Registration Number: INR000004058
Validity Period: Permanent
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
Tel.: 020-4225 0000, 020-6601 8100, Fax: 020-4225 0016
E-mail: [email protected]techmahindra.com Website:
Contact Person: Anil Khatri, Company Secretary
Tech Mahindra Limited Buyback News
News 1 – Buyback PDF / Letter of Offer [Download]
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