Infosys set to open Rs 13,000 crore share buyback on November 30; Narayana Muthy, Nilekani to participate

 BT Online   New Delhi     Last Updated: November 18, 2017  | 17:32 IST
Infosys set to open Rs 13,000 crore share buyback on November 30; Narayana Muthy, Nilekani to participate

Indian IT behemoth Infosys is all set to launch its Rs 13,000-crore share buyback offer. The Infosys share buyback scheme will open on November 30 and will continue till December 14, as per a statement filed by the compnay with the Bombay Stock Exchange.

Companies usually opt for share buybacks in order to improve earnings per share and return surplus cash to shareholders, while supporting share price during period of sluggish market condition. Some of the founders and high-profile former executives associated with Infosys have been calling for share buyback for quite some time now so that the surplus capital with the company could be returned to shareholders.

Now the first ever share buyback in the 36-year long historry of Infosys is expected to see the IT player buying back more than 11.30 crore shares for a price of Rs 1,150 apiece according to a statement by Infosys.

Going by the BSE filing, Infosys will spend around Rs 13,000 crore to buy back a total of 11,30,43,478 equity share of a face value of Rs 5 from registered shareholders as on November 01, 2017. Reports are that founders Narayana Murthy and Nandan Nilekani will also sell their shares in the buyback.

In its regulatory filing to the BSE oulining the share buyback dates, Infosys said that the company through letter dated November 16 received observations from the Securities and Exchange Board of India (SEBI) on the draft letter of offer for the buyback.

The biggest Indian IT company and larger rival of Infosys, Tata Consultancy Services (TCS), completed a Rs 16,000-crore mega buyback offer earlier this year in May. Other competitors like Cognizant, Wipro and Mindtree had also made similar announcements.

Infosys went through a period of upheaval earlier this year when the first non-founder CEO of three years, Vishal Sikka, stepped down citing interference from company founders, especially N R Narayana Murthy. The company is in the process of finding and naming a new CEO. Although reports of Ashok Vemuri being named the next Infosys CEO were doing the rounds, he turned down any such plans.

Meanwhile, Narayana Murthy has exuded confidence in the present Infosys Chairman Nandan Nilekani that he can choose a competent CEO without any help and the company is doing well under him.

Youtube
  • Print

  • COMMENT
A    A   A
close