ExlService Holdings (EXLS) said Tuesday that it has entered into an accelerated share repurchase agreement with Morgan Stanley (MS) to repurchase $125 million of its common stock.

The number of shares the company will repurchase under the agreement will be based on the average of the daily volume-weighted average prices of the shares during the term of the agreement, the company said

The agreement, part of the company's recently authorized $500 million repurchase program, will be funded with cash on hand and borrowing from its credit facility, the company said.

ExlService shares were 1% higher in premarket trading.