LIC to meet FinMin on Infosys buyback
Life Insurance Corporation of India (LIC) will soon consult the finance ministry on the Infosys crisis.
According to sources, the insurer may seek the ministry’s guidance on opting to take the buyback route opened by Infosys. The state-run insurance company, which owns 7.03 per cent stake in the information technology (IT) major, is mulling over the amount of shares it would tender in the repurchase scheme.
A final call could be taken by LIC after consultation with the ministry and Infosys management. “We are yet to take a call on the Infosys’ buyback offer. Even if we participate in the buyback, it will be partial,” said a LIC source.
The Infosys’ board last week proposed a Rs 13,000-crore share buyback programme. The buyback price has been fixed at Rs 1,150 a share, 28.6 per cent higher than the current market rate of Rs 894 a share.
On August 18, Infosys shares had plunged 10 per cent due to the uncertainty created by the resignation of chief executive officer and managing director Vishal Sikka.
Sources said Infosys’ top management and senior board members would in the coming weeks appraise major investors such as LIC on its road map. Meanwhile, the insurer would also meet the promoter camp, led by Murthy, to get that side in this battle. Besides the insurer, the company is likely to also meet domestic mutual funds (MFs) and key foreign investors.
In a letter to Infosys, MFs termed the developments at Infosys “very concerning”, and said they “strongly felt” co-founder Nandan Nilekani should be requested to join the board in a suitable capacity.
After LIC, the two biggest institutional investors in Infosys are OppenheimerFunds, which has a 2.16 per cent stake, and Singapore government’s GIC (2.11 per cent). HDFC MF and ICICI Prudential MF hold two per cent and 1.5 per cent, respectively.