Nucleus Software Co-Founder Reveals Reasons Behind Rs 72-Crore Share Buyback

Nucleus Software Ltd., which completed its buyback of shares on Friday, undertook the move to return surplus cash to shareholders and capitalise on tax benefits before changes in taxation take effect on Oct. 1, according to the company’s co-founder and Managing director, Vishnu R. Dusad.

In Budget 2024, the government announced changes in taxation pertaining to share buybacks. Under the new regulations, tax liability for buybacks of shares will be shifted from companies to shareholders. This has led many companies to announce share buybacks, as they fear tax liabilities from next month will deter shareholders from responding to such offers.

“The board always keeps balancing between shareholders and stakeholders, and the company’s needs as well as our customers’ needs,” Dusad told NDTV Profit.

The company conducted a buyback of 4.48 lakh shares worth Rs 72 crore between Sept. 9 and Sept. 13. The floor price for share repurchase was set at Rs 1,615 apiece, with the company buying about 1.7% of its equity capital through the offer.

The buyback was conducted to meet the cash deployment requirement within the business, Dusad said.

“We continue to invest in the latest technologies that would help improve the quality of our solutions for customers," he said.

The company will invest at least Rs 50 crore-Rs 100 crore in new technologies in the next one or two years, the top executive revealed. 

“The more our ability to acquire new technologies, the more we would be investing,” Dusad noted, adding they will invest in both hardware and software.

The company’s revenues over the last six quarters have remained flat in the range of Rs 190 crore to Rs 210 crore. Commenting on the projections, Dusad said they were in talks for more orders to boost the topline.

He expected the topline to go up when inflow of orders started to come in.