New Delhi:
Country’s second largest software services company Infosys on Thursday said it “periodically” reviews the capital allocation policy, and the management will take a decision on share buyback at an “appropriate time”.
The statement comes at a time when Indian IT companies are under increasing pressure from investors to look at utilising large amounts of cash on their books either through share buyback or generous dividend.
“Infosys has a clear, defined capital allocation policy which is periodically reviewed by the Board. We have increased the dividend payout twice in the past three years as a result of this process,” an Infosys spokesperson said in an emailed statement.
“The Board and the management will continue to review the policy and take a decision at an appropriate time,” she added.
Two of Infosys’ former CFOs—TV Mohandas Pai and V Balakrishnan—recently exhorted institutional investors to raise questions about the huge cash pile on the company’s books, saying investors have an obligation to protect their investment.
While there were reports that Infosys may consider a Rs 12,000 crore share buyback, the company had declined to comment on the issue.
Infosys had liquid assets, including cash and cash equivalents and investments worth Rs 35,697 crore (about USD 5.25 billion) on its books at the end of December 2016.
Earlier in the day, Infosys’ larger rival, Tata Consultancy Services (TCS) said its Board will meet on February 20 to consider a share buyback.
TCS too had Rs 43,169 crore cash and investments on its book at the end of December, 2016.
Following industry peer Cognizant’s USD 3.4 billion buyback announcement few days ago, industry watchers had warned that floodgates for Indian IT firms could open with more and more investors demanding similar action from domestic firms.
