Infosys to consider proposal for share buyback

Bengaluru: Infosys, India’s second-biggest software services exporter, has said it will consider a proposal for buyback of its equity shares at its meeting to be held on August 19.

The announcement comes close on the heels of the completion of a Rs 16,000 crore share buyback by rival Tata Consultancy Services (TCS).

The outcome of the board meeting will be disseminated to the stock exchanges after conclusion of the board meeting, he said.

Infosys, however, did not reveal details of the proposed share buyback in the intimation sent to stock exchanges yesterday.

Infosys, in April, had said that it will pay up to Rs 13,000 crore to shareholders during the current financial year through dividend and/or share buyback.

The Bengaluru-based firm had recently adopted a new Articles of Association that included a provision for buyback.

Infosys, which has cash reserves of about USD 6 billion on its books, has been under pressure from investors to utilise the amount either through share buyback or generous dividend.

The pressure had grown further after Infosys industry peers Cognizant and TCS announced their mega buyback offers worth USD 3.4 billion and Rs 16,000 crore, respectively, to return surplus cash to shareholders.

Country’s fourth largest IT services firm HCL Technologies has also approved a buyback of up to 3.50 crore shares worth Rs 3,500 crore.

Infosys had said its current policy is to pay a dividend of up to 50 per cent of post-tax profits of a financial year.

Share buybacks typically improve earnings per share and return surplus cash to shareholders while also supporting share price during period of sluggish market condition.

Two of Infosys former CFOs — T V Mohandas Pai and V Balakrishnan — had exhorted institutional investors to raise questions about the huge cash pile on the company’s books, saying investors have an obligation to protect their investment.

Kindly send reply or comments on this topic to [email protected]
Source:Zee news