Cloud-based communication provider Tanla Platforms, formerly known as Tanla Solutions, on Friday announced a proposal to consider a share buyback of the company next week. “This is to inform you that the Board of Directors of the company will consider a proposal for buyback of Equity Shares of the company including matters related/incidental thereto, at its meeting which is scheduled to be held on Thursday, September 08, 2022,” the IT firm stated in an exchange filing today.
Shares of Tanla Platforms jumped as much as 4.48 per cent to hit an intraday high of Rs 754 on BSE. The market capitalisation (m-cap) of the company stood at Rs 10,102.18 crore.
As of 1:49 pm, Tanla Platforms was up 3.28 per cent to trade at Rs 745.35 on BSE. On NSE, the stock was trading 3.30 per cent higher at Rs 745.
A share buyback or share repurchase is an action taken by corporate entities to buy back their shares from existing shareholders, usually at a premium to the market price. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
Last month, the company announced a dividend of Rs 6 per equity share with a face value of Re 1 each (600 per cent of the face value). The record date for the same was August 19.
The company’s stock has plunged around 59 per cent so far this year, in line with the weaker trend in global IT stocks. However, if we see the trend for the past five years, the stock — which virtually has a monopoly in the OTP (one-time password) business — had given multi-bagger returns of more than 2,000 per cent.
Since this year’s start, the global IT sector has witnessed a steep fall. In sync, the Indian IT and new-age tech stocks mirrored the weak trend.
On the sharp corrections, the company had mentioned, “It was impacted by headwinds such as market disruption, modernisation of the company’s legacy systems and foreign currency impact of Euro depreciation.”
Meanwhile, the company reported a decline in its net profit during the June quarter (Q1) of the current financial year. Tanla Platforms’ profit fell to Rs 100 crore in Q1 (2022-23) as compared to Rs 140 crore in the March quarter (Q4 2021-22).