Owing to regulatory requirements, Shiv Nadar Foundation offloaded 56 million worth Rs 1,150 crore in HCL Technologies on Monday constituting 0.79 per cent stake in the company. The Foundation is the philanthropic arm of the group which supported by donations from HCL Corporation and its associates. After Monday’s transaction, the Foundation doesn’t hold any shares in HCL Technologies as of date.
The company’s shares ended at Rs 2,067.35 up by 0.13 per cent from the previous close on a day when the BSE dropped by 604.17 points or 2.05 per cent to end at 28,844.78 points.
Pawan K Danwar, chief financial officer of Shiv Nadar Foundation said that public charitable trusts get tax exemptions or waivers but are subject to certain conditions. The Foundation had received the shares in HCL Technologies as a donation from HCL Corporation in 2013. Since Shiv Nadar Foundation is a registered public charitable trust, under the Income Tax rules, a trust should not hold shares in a company after the expiry of one year from the end of the previous year in which such shares are acquired.
The foundation also follows the April to March financial year and the sale coincided with budget planning for the next year. “These funds will also help the Foundation to meet its financial requirement for fiscal year 2015-16 and the future years. So, a combination of various factors led to the sale,” added Danwar.
“This transaction has been concluded at one go at a discount to the last closing price of HCL Technologies share to avoid any overhang in the market for shareholders of HCL Technologies,” the company’s statement to the stock exchanges said.
The last sale of shares in HCL Technologies by the foundation was in February 2012.
In 2013, founder and chairman of HCL Corporation Shiv Nadar had committed Rs.3,000 crore of his personal wealth to furthering the causes of the Foundation which runs several educational institutions over the next five years.
The foundation’s initiatives include VidyaGyan schools in Uttar Pradesh, SSN Institutions in Tamil Nadu and Shiv Nadar University located in Greater Noida.
The foundation, set up in 1994 had made investments of over Rs.1,800 crore till March 2013. However, the institution has not made public its further investments post 2013. It has also not provided specifics of the how the proceeds from the current share sale will be used.