Infosys board of directors approved a share buyback aggregating up to Rs 9,200 crore. This will amount to less than 15 per cent of the aggregate of the total paid-up share capital and free reserves of the company as per the latest financial statements on March 31, 2021, the company said in an exchange filing. The company has set a maximum buyback price of Rs 1,750 per equity share.
The buyback will be completed "through the open market route via the Indian stock exchanges, in accordance with the provisions of the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 (as amended) and the Companies Act, 2013 and the rules made thereunder," Infosys clarified in its filing.
Infosys said that American Depositary Shares (ADS) holders can convert the same into equity shares and, subsequently, opt to sell the same on the Indian share market during the buyback period.
"Subject to the market price of the equity shares being equal to or less than the maximum buyback price, the indicative maximum number of equity shares bought back would be 52,571,428 equity shares (maximum buyback shares), comprising approximately 1.23 per cent of the paid-up capital of the company as of March 31, 2021 (on a standalone basis). If the equity shares are bought back at a price below the maximum buyback price, the actual number of equity shares bought back could exceed the maximum buyback shares, but will always be subject to the maximum buyback size," said Infosys.
The company shall utilise at least 50 per cent of the amount earmarked as the maximum buyback size for the buyback, i.e., Rs 4,600 crore (minimum buyback size). Based on the minimum buyback size and maximum buyback price, the company would purchase a minimum of 26,285,714 equity shares.
Infosys' board has also constituted a buyback committee, comprising the company's Chief Operating Officer, Chief Financial Officer, Deputy Chief Financial Officer, General Counsel and Company Secretary.
The buyback scheme is subject to shareholders by way of a special resolution as well as all required statutory and regulatory approvals. The process, timelines and other statutory details of the buyback will be announced to the public in future in accordance to the buyback regulations, Infosys stated.
Earlier today, Infosys announced its financial results for the quarter and year ended March 31, 2021. The company logged a net profit of Rs 19,351 crore for the financial year 2020-21, a 16.6 per cent rise over the previous fiscal. The Indian IT major saw its revenue grow 10.7 per cent to Rs 1,00,472 crore, while Operating margin expanded 320 basis points to 24.5 per cent during FY21.
For the March quarter, Infosys posted a net profit of Rs 5,076 crore, marking an increase of 17.5 per cent YoY. Its revenue rose 13.1 per cent YoY to Rs 26,311 crore during the quarter under review.
The company gave a revenue growth guidance of 12-14 per cent in constant currency for fiscal year 2021-22, while it expects operating margin to be at 22-24 per cent.
The company's board recommended a capital return of Rs 15,600 crore, including final dividend of Rs 6,400 crore and open market share buyback of Rs 9,200 crore.
(Edited by Vivek Punj)