1. Techno Electric and Engineering completes repurchase of shares worth Rs 60 crore

Techno Electric and Engineering completes repurchase of shares worth Rs 60 crore

Techno Electric and Engineering in a regulatory filing on Monday said that it has completed repurchasing its shares worth Rs 60 crore.

By: | Mumbai | Published: April 25, 2017 5:56 AM
A total of 49 companies came with share repurchase offers in the financial year (FY) 2017, worth Rs 34, 648 crores, the highest in 19 years. (PTI)

Techno Electric and Engineering in a regulatory filing on Monday said that it has completed repurchasing its shares worth Rs 60 crore. The buyback was made from all the existing shareholders of the company on a proportionate basis under the tender offer route. The offer was subscribed by 9.76 times with shareholders tendering 1.46 crore shares against the offer to buy back 15 lakh shares. VC Corporate Advisors was the manager to the buyback. Post buyback the promoters holding has increased from 57.98% to 58.75%.

A total of 49 companies came with share repurchase offers in the financial year (FY) 2017, worth Rs 34, 648 crores, the highest in 19 years. The government’s dependence on the coffers of cash-rich PSUs to meet its divestment target and the new additional dividend tax regime are attributed as the reasons behind this trend.

Some marquee names of India Inc are gearing up to repurchase their shares in FY 18. Last week, TCS the largest IT company in the country said in an exchange filing that its shareholders have given their approval for the proposed buyback of equity shares. TCS’s offer to repurchase shares worth Rs 16,000 crore is the biggest in the past 18 years. Earlier, Reliance Industries had come with a buyback offer of Rs 10,440 crore in 2012. The board of HCL approved the proposal to buyback for an amount of Rs 3,500 crore in March.

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Earlier this month, Infosys said it will pay up to Rs 13,000 crore to shareholders during the current financial year through dividend and/or share buyback.

Buybacks have become the preferred route over dividends, as dividend income in the hands of all residents, domestic companies, trusts or funds except those established for religious, educational or charitable purposes, attracts an additional dividend tax of 10 % dividend income over Rs 10 lakh a year.

The buyback is the process by which a company repurchases its own shares from its stakeholders. The bought back shares are extinguished and the company’s equity base shrinks.

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