Infosys share buyback plan: Stock closes at four-month high; top gainer on Sensex, Nifty

The Infosys stock on Thursday closed at a four-month high level on Thursday a day after the Bengaluru-based firm said it would consider a proposal for buyback of its equity shares at its meeting to be held on August 19.

 The stock was top gainer on Nifty 50 and the 30 stock Sensex.

A share buyback is repurchase of a company's outstanding shares that reduces the number of shares in the open market.

The buyback is carried out usually at a premium compared with a current market price at that point.

Also read: Here's why Infosys is mulling buyback, what it means for investors

The Infosys stock closed 4.54 percent or 44.35 points higher at 1,021.15 level on the BSE. The stock is up 1 percent on an year to date basis.

The stock hit an intra-day high of 1028 and low of 998 on the BSE.

On the Nifty, the stock gained 4.70 percent or 45.85 points to 1021 level  and was the top traded share on the exchange in terms of volume.

Meanwhile, the Sensex and Nifty closed 0.08 percent and 0.07 percent higher, respectively.

The announcement from Infosys, India's second-biggest software services exporter, comes close on the heels of the completion of a Rs 16,000 crore share buyback by rival Tata Consultancy Services (TCS).

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

Infosys' buyback decision has come in the back of massive investors' pressure who wanted the company to utilise its cash reserves of $6 billion either through share buyback or generous dividend.

The pressure had grown further after other tech companies such as Cognizant and TCS announced their mega buyback offers worth $3.4 billion and Rs 16,000 crore, respectively, to return surplus cash to shareholders.

HCL Technologies has also approved a buyback of up to 3.50 crore shares worth Rs 3,500 crore.