Infosys board approves Rs 13,000 crore share buyback

The board of Infosys, India’s second-largest software exporter, on Saturday approved a Rs 13,000 crore share buyback plan, the first since the company’s inception 36 years ago.

The buyback offer size amounts to 20.51 per cent of the total paid-up equity capital and free reserves of the company and will comprise of the purchase of 113,043,478 shares aggregating up to 4.92 per cent of the paid-up equity capital at a price of Rs 1,150 per equity share, according to a filing on the BSE.

The buyback plan was announced in April. The company then had decided to pay out Rs 13,000 crore to shareholders through dividends or buy back shares by using 70 per cent of its free cash flows. Various approvals from exchanges in both the U.S. and India has led to the delay.The company has $6.1 billion worth of liquid cash at hand, Vishal Sikka, who resigned as the firm’s CEO and managing director had said on August 18.

Mr. Sikka’s exit may have cost Infosys’ shareholders a whopping Rs 22,520 crore on Friday after shares of the Bengaluru-based firm plunged 9.6 per cent to Rs 923.10. This was the stock’s biggest single-day fall since April 12, 2013. Analysts said that it was too early to downgrade the stock.