After Sikka's exit, Infosys stock makes it to LIC 'buy list'
Turmoil-hit Infosys is on the “buy list” of Life Insurance Corporation of India (LIC) for this month, according to a senior official at the country’s largest insurance company.
On Friday, the stock ended at Rs 923, down 9.6% over previous close of Rs 1,021. It had hit an intra-day low of Rs 884.2 and more than Rs 7,600 crore worth of shares had changed hands at the NSE counter and another Rs 750 crore at the BSE.
Most investors Business Standard spoke to said that they were closely monitoring the developments. Being a large stock in the benchmark Sensex and the Nifty indices, the stock is owned by a large number of institutional shareholders and exchange traded funds.
Shares of rival Tata Consultancy Services (TCS) had gained 1.32% on Friday as some investors switched from Infosys, according to some market players.
“After the latest correction, the stock has become attractive on valuation front. We might consider buying shares from the open market and tendering some in the buyback. Given the uncertain phase the IT industry is going through, we cannot expect a big bounce in the shares. The buyback is a good opportunity to cash out some of our existing holdings,” said a fund manager.
The acceptance ratio for non-retail shareholder is likely to be tiny as the buyback amounts for only 4.96% of the paid up equity share capital of the company. Retail shareholders (those holding less than Rs 2 lakh worth of shares) can expect a better acceptance ratio as they would have reservations for 15% of the buyback amount.