Infosys approves Rs 9,300-crore share buyback

Infosys Ltd. has approved a proposal to buy back equity shares worth Rs 9,300 crore.

The software services company will repurchase 5,02,70,270 equity shares, representing 1.19% of the total paid-up share capital, according to an exchange filing.

The buyback price will be up to Rs 1,850 apiece through the open market route. The maximum buyback price represents a 30% premium to Thursday’s closing price.

The board feels that looking as listings in U.S., regulatory concerns and EPS (earning per share) accretions that it would be better to go for open market offer than tender route,” Nilanjan Roy, chief financial officer said.

This is the fourth buyback announced by the company in its history. The first was a tender offer announced in 2017, when the company bought back shares worth Rs 13,000 crore at Rs 1,150 a share.

The second buyback was conducted in 2019, when the company bought back shares worth Rs 8,260 crore at an average price of Rs 747 a share.

And the third was in 2021, when it bought back shares worth Rs 9,200 crore as part of its capital allocation plan.

The Bengaluru-based IT company enhanced its capital allocation plan and aimed to return 85% of free cash flow cumulatively over a five-year period via buyback and dividends.

Morgan Stanley in an Oct. 12 note said Infosys may announce a buyback of shares worth around $1-1.4 billion (around Rs 8,400-11,600 crore). India’s second-largest IT services firm can potentially return Rs 25,000 crore to shareholders in each of the next two years, it said.

Infosys also announced results for the quarter ended September on Thursday.

Shares of Infosys closed 0.64% lower before the results were announced, compared with a 0.47% loss in the benchmark Nifty 50. Bloomberg