Chennai-based Matrimony.com will spend ₹72 crore in the buyback of 7.02 lakh equity shares. This constitutes 3.16 per cent of total number of the equity shares in the paid-up equity share capital of the company as on March 31, 2024. The buyback price is ₹1,025 per equity share. The funds for the Buyback will be made available out of internal accruals, the company said.
This is the company’s second buy back. In June 2022 Shareholders approved Matrimony.com’s first buy back for ₹75 crore at a buyback price of ₹1,150.
The buyback price represents a premium of 60.16 per cent and 60.21 per cent over the volume weighted average market price of the Equity Shares on BSE and NSE, respectively, during the three months period preceding September 2, 2024 (being the date of intimation to the Stock Exchanges regarding Board Meeting date(“Intimation Date”); 27.48 per cent and 26.91 per cent over the closing price of the Equity Share on BSE and NSE, respectively, as on September 5, 2024 (the date of the Board meeting approving the Buyback), the company said.
“It is one way of rewarding shareholders and it is a board decision,” Murugavel Janakiraman, Founder & CEO of the Chennai-based Matrimony.com, told businessline.
The buyback, which is being implemented through the tender offer route as prescribed under the SEBI Buyback Regulations, would involve a reservation of up to 15 per cent of the equity shares, which the company proposes to buyback, for small shareholders or the actual number of equity Shares entitled as per the shareholding of small shareholders on the Record Date, whichever is higher.
Small shareholders
The company believes that this reservation for small shareholders would benefit a significant number of the company’s public shareholders, who would be classified as “Small Shareholders.
‘Small Shareholder’ means a shareholder of the company, who holds shares whose market value, on the basis of the closing price of shares, on the recognised stock exchange in which highest trading volume in respect of such security, as on Record Date (i.e. October 25, 2024), is not more than ₹200,000, as defined in Regulation 2(i)(n) of SEBI Buyback Regulations.
On the rationale of the buyback, the said that it has been generating significant amounts of cash on an ongoing basis and is a debt free entity. The current buyback proposal was in line with the company’s capital allocation practices of returning excess cash to shareholders, thereby increasing shareholder value in the longer term, and improving the Return on Equity.
The company’s promoter will not participate in the buyback, which opened on October 30 and closes on November 6.
