Infosys may announce another share buyback worth $1.6 billion: Report
New Delhi: Infosys, India’s second-biggest outsourcer, is likely to consider a proposal for a share buyback, when its board meets on January 11, to consider the audited quarterly results for the October-December quarter, the Times of India reported. This time the buyback could be worth $1.6 billion (nearly Rs 11,200 crore), the daily added.
During the previous financial year, Infosys had announced a share buyback worth Rs 13,000 to shareholders at Rs 1,150 a piece. In December the company will come out of the one-year moratorium for the previous buyback.
The daily citing sources said family members of some founders may tender their shares in the buyback exercise.
Share buyback is a process through which a company distributes its accumulated cash to shareholders. Analysts believe buybacks help reinforce investor confidence and boosts share prices in uncertain times.
The ToI report citing sources said the share buyback could happen at around 20-25 per cent premium to the prevailing market value. As of 2:20 pm on Monday, Infy shares were trading 0.98% higher at Rs 652.55 apiece compared to Friday’s close of Rs 646.20.
Worth mentioning here that Infosys board had earlier told that it will return approximately Rs 2,600 crore through a special dividend to shareholders and also identified Rs 10,400 crore to be paid out to shareholders for the current financial year in a manner decided by the board.
It may be noted that other IT companies like TCS, Wipro, Cognizant, HCL Technologies and Mindtree in the recent past have already announced share buyback to boost shareholder value as the sector is going through uncertain times amid global macro headwinds, political instability, which is likely to impact IT spending of top companies.
