The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better price to earnings (P/E) multiple.
In the past six weeks, NIIT Technologies
has underperformed the market by falling 8 per cent. In comparison, the S&P BSE Sensex was up 1.6 per cent, while the sector index S&P BSE IT index down 1.6 per cent during the same period till yesterday.
At 11:41 am, the stock was trading 5.6 per cent higher at Rs 1,556 on the BSE, as against a 0.63 per cent rise in the benchmark index. The trading volumes on the counter nearly doubled with a combined 1.09 million equity shares changing hands on the NSE and BSE so far.