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Infosys completes Rs 13,000 crore buyback plan

by December 24, 2017 General
Infosys (File|Reuters)

Infosys (File|Reuters)

BENGALURU: India’s second largest IT services company, Infosys on Saturday said that it has completed its Rs 13,000 crore buyback programme —a first in the company’s over three-decade history.The Bengaluru-headquartered company had in August announced a Rs 13,000 crore share buyback plan and said would repurchase more than 113 million equity shares aggregating up to 4.92 per cent of the paid-up equity share capital at a price of Rs 1150 apiece.

The company repurchased 1.39 million and 1.5 million from Rohan Murthy (son of co-founder NR Narayana Murthy) and Sudha Gopalakrishnan (wife of co-founder S Gopalakrishnan), respectively, among the other promoters of the company.  Post buyback, the promoters will hold 12.9 per cent of Infosys total equity shares, as per the filing.The filing showed that of all the equity shares tendered in the buyback, 5.41 per cent were by LIC and 2.18 per cent by Singapore government.

The founders and families — classified as promoters group — held 29.28 crore shares, or 12.75 , per cent in Infosys at the end of September 2017. As of September this year, Sudha Gopalakrishnan held the largest share in individual capacity among promoters group members with 2.14 per cent shareholding.
Infosys is the third IT services firm to receive higher subscription share buyback.

According to the IT major, it saw five times higher subscription than reserved number of shares in the buyback. It has received applications for more than 565 million shares. Wipro saw 341 per cent higher subscription, while TCS reported nearly 221 per cent higher response against its buyback plan.
The buyback had been a long-standing demand by some of the founders and high-profile former executives, who have been pushing Infosys to return surplus capital to shareholders.

According to analysts, buybacks would typically improve earnings per share and return surplus cash to shareholders, while supporting share price during period of sluggish market condition. Earlier this year, its rival Tata Consultancy Services completed a Rs 16,000-crore mega buyback offer. Other competitors like Cognizant, Wipro and Mindtree had also made similar announcements.