Credit Bulletin
January 03, 2020 | Mumbai
 
NIIT Technologies Ltd (NIIT Tech) ratings unchanged by proposed buy-back of shares
 

CRISIL's corporate credit ratings of 'CRISIL AA/Stable/CRISIL A1+' on NIIT Tech remain unchanged following the announcement that its board of directors have approved the buy-back of up to 19,56,290 shares, representing 20.23% of the fully paid-up equity share capital and free reserve of the company. The buy-back size should not exceed Rs 337.46 crore, at a price of Rs 1,725 per share.
 
The proposed buy-back should be funded through the liquid surplus, which stood at approximately Rs 752 crore as on September 30, 2019. The buy-back should be made through an open tender offer and is subject to the approval of NIIT Tech's shareholders. The timelines have not been finalised yet.
 
CRISIL believes NIIT Tech's financial risk profile will not be impacted by the buy-back and remain strong, supported by its healthy annual cash accrual, strong networth, and negligible debt. Liquid surplus should also gradually build up post the buy-back, given the company's moderate funding requirement for capital expenditure and working capital. NIIT Tech's business risk profile should remain healthy, driven by its strong market position in information technology services, diversified presence across verticals and service lines, healthy operating efficiency, and cash-generating ability.

 

For accessing the previous rating rationale, refer to the following link:
Company Name Link to Rating Rationale
NIIT Technologies Limited Click here
Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Links to related criteria
CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
Rating Criteria for Software Industry
CRISILs Criteria for Consolidation

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