IndiaMART Shares Flat After INR 500 Cr Buyback Announcement

Shares of the listed B2B ecommerce unicorn IndiaMART remained steady at INR 3,040.00 as of 11:39 AM on August 30 following the company’s announcement of its planned share buyback.

IndiaMART announced the buyback offer of 12.5 Lakh shares using a proportionate tender offer on August 23. The buyback is slated to open on August 31 and close on September 6. 

The quantum of the buyback represents 2.04% of the total equity shares in the listed B2B ecommerce major. The shares will be bought back at INR 4,000 apiece, a premium of around 30% from the current share price.

The B2B ecommerce startup also filed a letter of offer giving more information on the share buyback on Tuesday (August 29).

The buyback offer size represents 24.12% and 24.33% of the aggregate of IndiaMART’s paid-up equity capital and free reserves as per the latest audited condensed interim standalone and consolidated financial statements of the company for the period ended June 30, 2023. The listed B2B ecommerce startup has appointed Axis Bank as the escrow agent for the transaction.

If there is full participation in the buyback, promoters’ and related group shareholding could rise from 49.22% to 49.34%, said IndiaMART. The public and non-promoter shareholding may fall from 50.78% to 50.66% of the post-buyback equity share capital.

IndiaMART also said that the buyback won’t significantly impact profits, but it will reduce funds available for investment income. The company further said that the buyback won’t hinder growth opportunities or operational cash needs.

The steadiness in shares comes a month after IndiaMART hit a 52-week high of INR 3,207.50 during intraday trading earlier this month, days after its Q1 FY24 results.

According to the B2B unicorn’s financials, it posted consolidated revenue of INR 282.1 Cr, up 25.65% YoY compared to Q1 FY23. At the same time, IndiaMART’s EBITDA reached INR 77.35 Cr in the quarter ended June 30, 2023, up 20.59% YoY.