Tech Mahindra Ltd. shares declined up to 4% on October 12 ahead of the company's board meetings later this week, when it will be considering interim dividend, bonus issue of shares along with its quarterly results. This could be the first time in 11 years that Tech Mahindra may issue bonus shares to its shareholders.
This could be the first instance of the company issuing bonus shares to its shareholders since March 2015, when it had issued one bonus shares in the 1:1 ratio.
The IT stock faced concerns that clients which contribute to its biggest vertical will face higher competition from satellite-based mobile services companies and may be forced to cut costs.
Telecommunication is Tech Mahindra's biggest vertical, contributing to over 32% of its consolidated top line in the June quarter. The company gets more than 75% of its revenue from the US and Europe.
Shares of US and European telecommunication companies ended lower Friday after SpaceX acquired low-band spectrum, raising concerns over growing competition from satellite-based mobile services.