What Prompted Matrimony.Com's Board To Approve A Rs 72-Crore Buyback

A day after announcing a buyback of up to seven lakh equity shares amounting to Rs 72 crore, Sushanth Pai, chief financial officer of Matrimony.com, said the buyback was a form of capital allocation policy.

“Our company is profitable, debt-free, and generates substantial cash flow. As of June 30, we had approximately Rs 382 crore in cash. Given this strong financial position, the buyback makes sense,” Pai explained, outlining the rationale behind the decision.

A share buyback is done when a company uses surplus cash to repurchase its shares from the market. This process benefits shareholders by decreasing the number of outstanding shares, which could increase the value of the remaining shares.

Matrimony.com plans to repurchase 7.02 lakh fully paid-up equity shares representing 24.85% of its total equity capital, based on its latest standalone and consolidated audited financial statements as of March 31, 2024.  

The company will buy the shares at Rs 1,025 apiece, which is higher than its current market price of Rs 807.50 as of Friday noon.

“You can do up to 25% of the net worth of your company as the buyback. Our net worth is about Rs 288 crore. So we have done the maximum in terms of buyback and the board has approved it at a price of Rs 1,025 per share,” Pai said.

The company will close the buyback after Oct. 1.

Matrimony.com also plans to foray into new businesses and an enabling resolution has been taken from shareholders already. 

The company’s executive said the idea behind expanding into new business segments was to take advantage of a consumer internet brand. 

“Our scope of business is very, very narrow so we want to make it a little more broad. We have taken an enabling resolution with shareholders. What businesses we start will be a board subject," he said.

The top executive said the company was evaluating multiple ideas for the new business and a final decision was yet to be taken.

Talking about the company’s projections for the year, Pai said the financial performance was likely to remain in line with the numbers of the last three fiscals.

“Q1 this year had a higher number of inauspicious days in comparison to Q1 of the previous year. Therefore, after a long time, we had a decline in Quarter 1. As we see the business, we are looking at various growth levers. Q2 is also expected to be a muted quarter,” he said.

From Q3 onwards, Matrimony.com is likely to see a bounce back with new initiatives and launches scheduled during the latter part of the year.