NIIT Tech gains 3%, trades near record high as board approves share buyback

Shares of NIITTechnologies bounced back 4 per cent from early morning lows, and edged 3 per cent higher to Rs Rs 1,626, on the BSE on Tuesday after its board approved share buyback at price of Rs 1,725 per share via tender offer.
The stock of the IT consulting & software firm, which touched an intra-day low of Rs 1,560, was trading close to its record high level of Rs 1,642, touched on December 17, 2019. In the past six trading days, the stock has rallied 10 per cent, after the company, on December 16, announced that its board will meet on December 23 to consider share buyback proposal.

“The board of directors of the company at their meeting held on December 23, approved buy-back of up to 1.96 million equity shares at a price of up to Rs 1,725 per share aggregating up to Rs 337 crore,” NIIT Technologies said in a regulatory filing after market hours.
The number of securities proposed to be bought back represents 3.1 per cent of the existing paid up equity share capital of the company. Hulst B.V., promoter of the Company has intent to participate in the buyback, it added.
At 09:56 am, NIIT Technologies was trading 2.5 per cent higher at Rs 1,617 on the BSE. In comparison, the S&P BSE Sensex was up 0.02 per cent at 41,649 points. The counter has seen huge trading volumes with a combined 1.29 million equity shares changing hands on the NSE and BSE so far.

NIIT falls 15% as stock turns ex-date for share buyback

Shares of National Institute of Information Technology (NIIT) slipped 15 per cent to Rs 74 in the intra-day trade on the BSE on Thursday on the back of heavy volumes as the stock goes ex-date for share buyback today. The stock of the IT training services company was trading close to its 52-week low price of Rs 70 per share.
On August 10, 2019, NIIT's Board had approved to buyback up to 26.8 million equity shares at Rs 125 per share for Rs 335 crore. Accordingly, October 18, 2019, was fxed as the record date for the purpose of determining the entitlement and the name of the equity shareholders who shall be eligible to participate in the buyback.

NIIT said the buyback would help to improve financial ratios, including return on equity and earnings per share, due to reduction in the equity capital, leading to increase in the long-term value for shareholders. In May 2019, NIIT divested its entire shareholding in NIIT Technologies for a consideration of Rs 2,020 crore.
In the past six months, the stock has underperformed the market by falling 30 per cent, as against a per cent decline in the S&P BSE Sensex.
At 11:10 am, NIIT was quoting 9 per cent lower at Rs 79, as compared to a 0.1 per cent rise in the benchmark index. The trading volumes on the counter more-than-doubled with a combined 1.32 million equity shares changing hands on the BSE and NSE.

NIIT announces Q1 net profit at Rs 1,090.4 crore; revenue falls 2%

Skills and talent development company NIIT Ltd on Saturday posted a consolidated net profit of Rs 1,090.4 crore for the June quarter, and said its board has approved a buyback programme of up to Rs 335 crore.
Its net revenue declined by 2 per cent to Rs 210.3 crore in the quarter under review from Rs 214.3 crore in the year-ago period.

NIIT Ltd, which had registered a net profit of Rs 17.9 crore in the April-June 2018 quarter, said profit after tax for the June 2019 quarter includes one-time income on account of divestment of NIIT Ltd's shareholding in NIIT Technologies.
In April this year, funds affiliated with Baring Private Equity Asia (BPEA) bought about 30 per cent stake in NIIT Technologies from NIIT Ltd.
The transaction, which closed in May, saw NIIT Ltd receiving gross proceeds of Rs 2,020.4 crore in cash. The company had constituted a committee to make recommendations for utilisation of proceeds for rewarding shareholders.
The board has approved a proposal to buy back up to 2.68 crore equity shares from shareholders at Rs 125 per share, representing about 16 per cent of the total paid up equity share capital, for an aggregate amount not exceeding Rs 335 crore.
NIIT Vice Chairman and Managing Director Vijay K Thadani told PTI that he expects the buyback process to be completed by December this year, subject to regulatory approvals.
Commenting on the results, Thadani said the increase in revenue visibility for Corporate Learning Group (CLG) and the growth in 'Go forward' business in Skills and Careers (SNC) "vindicate the company's strategy and reaffirm the confidence of customers, in our ability to add value".
The company's CLG business recorded net revenue of Rs 152.4 crore. Under CLG, the company signed five new Managed Training Services (MTS) contracts in the June 2019 quarter, taking the MTS customers tally to 49.
CLG recorded revenue visibility of USD 264 million, up 18 per cent year-on-year.
The SNC group recorded net revenue of Rs 51.7 crore during the said quarter. The SNC 'Go forward' business grew by 15 per cent y-o-y.
MindChampion Learning Systems Ltd registered net revenue of Rs 6.2 crore.
The company's headcount stood at 2,521 people at the end of June 2019.

Baring Private Equity Asia to acquire 30% in NIIT Tech for Rs 2,627 cr

Funds affiliated with Baring Private Equity Asia (BPEA) will buy about 30 per cent stake in mid-sized IT services firm NIIT Technologies from NIIT Ltd and other promoter entities for about Rs 2,627 crore, as per a regulatory filing.
The deal will also trigger an open offer under which BPEA will make an offer to the public shareholders of NIIT Technologies for purchasing up to 26 per cent additional shareholding -- taking the total deal value to up to Rs 4,890 crore.

In a late night filing to BSE Saturday, NIIT Technologies said "funds affiliated with Baring Private Equity Asia (BPEA) have signed definitive agreements to buy about 18.85 million shares" of the company (approximately 30 per cent shareholding) from NIIT Limited and other promoter entities at a price of Rs 1,394 per share.
"The aggregate consideration for purchase of shares from promoter entities is estimated to be approximately Rs 2,627 crore," it added.
This includes about 14.4 million shares of NIIT Ltd, and about 4.3 million shares held by members of families of NIIT founders Rajendra Pawar and Vijay Thadani.
NIIT Ltd holds about 23 per cent stake, while Pawar and Singh with their families hold around 7 per cent shares in NIIT Technologies.
In accordance with the Securities and Exchange Board of India (SEBI) regulations, BPEA will make an open offer to the public shareholders of NIIT Technologies for purchase of up to 26 per cent additional shareholding at a price of Rs 1,394 per share -- taking the total shareholding to approximately 56 per cent.
"The aggregate consideration for purchase of shares from promoter entities and the open offer is estimated to be up to approximately Rs 4,890 crore," it said.
In a separate filing, NIIT Technologies said the open offer for up to 1.62 crore fully paid-up equity shares (representing 26 per cent stake) will be made by Hulst BV along with The Baring Asia Private Equity Fund VII, LP, The Baring Asia Private Equity Fund VII, LP1 and The Baring Asia Private Equity Fund VII, SCSp.
This transaction is conditional upon customary conditions, including receipt of required regulatory approvals, including anti-trust and competition clearances from the Competition Commission of India.
"NIIT Technologies Ltd which became an independently listed company after demerger from NIIT Ltd in 2004, has grown into one of the most innovative and trusted IT services company in India.
"The long-standing relationships with marquee customers, many spanning over two decades, are a consequence of a sharp focus on identified verticals including, travel, banking and insurance and distinctive capabilities developed," NIIT Technologies Chairman Rajendra Pawar said.
He added that the involvement of BPEA will provide further impetus to the management team led by CEO Sudhir Singh to take the company to the next level of growth.
Vijay Thadani, vice chairman and managing director at NIIT Ltd, said BPEA's association will support the existing management team in capturing the opportunities in an increasingly digital world.
Credit Suisse acted as the exclusive financial advisor to NIIT Ltd and other promoter entities. Shardul Amarchand Mangaldas & Co acted as the legal advisor to NIIT Ltd. J Sagar Associates and Ropes & Gray acted as legal advisors to BPEA.