Hyderabad-based Nava Ltd has announced that its Board has accepted a buyback proposal from its wholly owned Singapore subsidiary, Nava Global Pte Ltd, under which the company will receive US$ 50 million (approximately ₹450 crore) as buyback proceeds.
The buyback values the subsidiary at US$ 1.26 billion, while Nava continues to retain a 100% ownership stake post-transaction.
Strengthening Capital Efficiency
The buyback has been initiated by Nava Global Pte Ltd after evaluating its financial position, dividend distribution policy, capital commitments, and cash flow requirements.
The subsidiary has decided to deploy surplus cash of up to US$ 50 million for the buyback of its equity shares held by Nava Ltd.
The buyback consideration has been determined based on an independent fair equity valuation of US$ 1.26 billion for Nava Global Pte Ltd.
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Strategic rationale behind the buyback
The buyback is aimed at achieving multiple strategic objectives for the company, including partial monetisation of its investment in the Singapore subsidiary, efficient utilisation of accumulated free reserves at Nava Global, and enhancement of liquidity to support new acquisitions as well as ongoing and upcoming projects.
Summary of the Nava buyback transaction
Under the transaction, 99,20,635 equity shares will be bought back out of a total 249,743,731 shares of US$ 1 each held by the company in Nava Global Pte Ltd. This includes 16,870 shares of S$ 1 each and 249,726,861 shares of US$ 1 each.
The buyback price has been fixed at US$ 5.04 per share, compared to a book value of US$ 1.20 per share, reflecting the independent valuation. The total consideration payable to the company amounts to US$ 50 million, equivalent to approximately ₹450 crore, calculated at an exchange rate of ₹90 per US$, subject to fluctuation.
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After accounting for the historical cost of investment of ₹48.33 crore for the shares being bought back, calculated on a FIFO basis, the transaction will be subject to long-term capital gains tax in the hands of the company.
The company clarified that there will be no impact on its voting rights in Nava Global Pte Ltd or in any downstream subsidiaries following the buyback.
Commenting on the development, Ashwin Devineni, Managing Director and CEO of Nava Ltd, said that the transaction reflects the company’s focus on disciplined capital allocation and long-term value creation.
He added that unlocking capital from a mature subsidiary and redeploying it in line with strategic priorities would improve capital efficiency, optimise returns, and enhance shareholder value, while preserving the financial strength and growth prospects of the group.
