Mindtree share price opened with a gap up at a gain of 2.11 percent in the early trading session on March 18 as the company's board is scheduled to consider the buyback proposal. The share price rallied 22 points or 2.38 percent up against the previous close to the high of today's trading session at Rs. 968.55.
In a filing to the exchanges on March 15, the Bengaluru-headquartered company, said, "The meeting of the Board of Directors of the company will be held on March 20 to consider the proposal to buyback the fully paid-up equity shares of the company".
"Pursuant to the company's code for prevention of insider trading, the trading window of the company will be closed from March 18 to March 22," as per the company's filing on BSE.
As of 12:30 p.m. IST, Mindtree outperformed the IT sector by 1.54 percent today. The stock has been trading higher than 5, 20, 50, 100 and 200-day moving average today. The respective price band for the share on Monday was Rs.1,040.60 to Rs. 851.40.
The price momentum of the stock has been positive since the last three months at a rate of 10.25 percent, however, it dropped 16 percent in six months in both the exchanges.
There is more volume traded close to the intra-day high, with 77 thousand shares changing hands on BSE and around 15 lakh shares traded on NSE.
The development related to the buyback comes at a time when there is speculation in the market that L&T is in advanced talk to buy out a 20.4 percent stake held by Cafe Coffee Day's founder V.G. Siddhartha- the largest shareholder in Mindtree.
Mindtree promoters, including the four founders of the company Krishnakumar Natarajan, Subroto Bagchi, N.S. Parthasarathy and Rostow Ravanan, collectively hold a 13.32 percent stake in the firm and have been rebuffing M&A overtures.
Sources aware of the development told the leading daily that India's largest engineering company is set to sign a binding agreement to close the deal with Siddhartha in the weeks ahead, which could trigger a hostile takeover bid, leading to an open offer by L&T to increase its stake to 51 percent. If this comes to pass, Mindtree's current management will lose control of the company.
(Edited by Rupa Burman Roy)