NetSol Technologies Limited, a prominent player in Pakistan’s technology sector, has unveiled plans to buy back 10 million ordinary shares while also offering 2 million treasury shares to its employees under a share option scheme. This strategic move, announced through a notice to the Pakistan Stock Exchange (PSX) on November 25, 2024, demonstrates the company’s commitment to boosting financial health and fostering employee engagement.
The decision to initiate the buy-back program was approved during a Board of Directors (BoD) meeting held on November 25, 2024. However, it remains subject to shareholder approval, which will be sought through a special resolution in an upcoming meeting. The buy-back will involve acquiring 10 million issued ordinary shares, each with a face value of Rs. 10. These shares will be purchased at the prevailing market price during the acquisition period, scheduled to run from January 3, 2025, to June 29, 2025, or until the target is achieved.
To fund this initiative, NetSol plans to utilize its distributable profits, relying entirely on internal funds. The company anticipates that the buy-back will lead to a stronger financial position by increasing the break-up value per share and improving earnings per share (EPS). Additionally, it provides an exit opportunity for shareholders who were unable to participate in the previous buy-back round.
In tandem with the buy-back, NetSol has announced the sale of 2 million treasury shares to eligible employees as part of its share option scheme. This move aligns with the Listed Companies (Buy-Back of Shares) Regulations, 2019, and underscores the company’s commitment to employee welfare and retention.
The announcement has already had a positive impact on NetSol’s stock performance. On November 25, 2024, the company’s share price surged by Rs. 8.96 during intra-day trading, closing at Rs. 135.68. This rise reflects growing investor confidence in NetSol’s strategic direction and financial stability.
NetSol’s buy-back plan and treasury share sale come at a time when some companies, such as Pak Suzuki Motor Company, are considering delisting from the PSX due to financial challenges and undervaluation. In contrast, NetSol’s initiatives signal its confidence in long-term growth and its commitment to enhancing shareholder value.
By leveraging this dual approach—strengthening shareholder returns through the buy-back and fostering employee loyalty through treasury share allocation—NetSol aims to solidify its position as a leader in Pakistan’s technology sector. The move is expected to enhance investor sentiment and showcase the company’s resilience amidst an evolving economic landscape.
The planned actions not only reflect NetSol’s robust financial health but also its dedication to aligning corporate strategies with stakeholder interests. As the company moves forward, it continues to set a benchmark for progressive practices within the industry, underpinned by a focus on growth, innovation, and value creation.