Buyback Alert: An important news for nearly 26,000 retail shareholders of this staffing solutions provider

Shares of Teamlease Services Ltd. gained on Tuesday, May 12, after the company said its board approved the proposal to consider a buyback of equity shares.

The board will meet on May 20 to consider its fourth quarter earnings as well as the buyback proposal.

At the end of the third quarter, Teamlease had a cash balance of ₹400 crore. Buybacks have resurfaced as an important capital return mechanism to shareholders after the recent tweaks made during the Union Budget.

This is the first share buyback that Teamlease will be announcing in three years. In May 2023, TeamLease had announced a buyback involving 1.92% of its paid up capital, where promoters had participated.

Analysts are of the view that given the company's limited dividend payout history, the proposed buyback could emerge as a key mode of capital return to shareholders. The key monitorable would be the buyback size and the extent of promoter participation.

At the end of the March quarter, the company's promoters held 31.11% stake in the firm. Meanwhile, public shareholders held 68.86% stake. Of these, there are 25,723 retail shareholders accounting for 6.55% of the total shareholding.

Shares of Teamlease are trading 3.7% higher on Tuesday at ₹1,401.7. The stock is up 19% over the last one month, but is still down 11% on a year-to-date basis.

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