NetSol Technologies Limited has announced plans to buy back 10 million ordinary shares, the company revealed in a notice to the Pakistan Stock Exchange (PSX) on Monday. The decision was approved during a Board of Directors (BoD) meeting held on November 25, 2024, and will be subject to shareholder approval via a special resolution.
The company also disclosed plans to sell 2 million treasury shares to eligible employees as part of its share option scheme, in line with the Listed Companies (Buy-Back of Shares) Regulations, 2019.
Details of the Buy-Back Program
The proposed buy-back will involve the purchase of 10 million issued ordinary shares, each with a face value of Rs10. The shares will be acquired at the prevailing market price during the purchase period, which will commence on January 3, 2025, and conclude on June 29, 2025, or earlier if the buy-back target is met.
NetSol clarified that the buy-back will be financed through the company’s distributable profits, using its internal funds.
The company anticipates that the buy-back will strengthen its financial position by increasing the break-up value per share and boosting earnings per share (EPS). It also provides an exit opportunity for shareholders who were unable to participate in the previous buy-back.
Impact on Share Price
Following the announcement, NetSol’s share price surged by Rs8.96 during intra-day trading, closing at Rs135.68 on Monday.
Shareholder Approval Required
Both the buy-back plan and the sale of treasury shares require shareholder approval, which will be sought through a special resolution in an upcoming meeting.
Market Context
NetSol’s announcement comes at a time when some companies, such as Pak Suzuki Motor Company, are considering delisting from the PSX due to financial challenges and low valuations. In contrast, NetSol’s initiative reflects confidence in its long-term financial health and commitment to enhancing shareholder value.
The move is expected to bolster investor sentiment and further solidify NetSol’s position as a leading player in Pakistan’s technology sector.
