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Infosys puts Sikka's resignation behind, approves Rs 13,000 crore share buyback to keep shareholders interest intact

The Board Of The Country’s Second-largest Software Services Provider Infosys Approved The Share Buy Back Of 11.3 Crore Shares, Or 4.92 Percent Equity, At Rs 1,150 Each At A Meeting On Saturday In Bengaluru, The Company Said In A Stock Exchange Filing.

News Nation Bureau | Edited By : Gautam Lalotra | Updated on: 19 Aug 2017, 03:13:35 PM
Infosys - File Photo

New Delhi:

The board of the country’s second-largest software services provider Infosys approved the share buy back of 11.3 crore shares, or 4.92 percent equity, at Rs 1,150 each at a meeting on Saturday in Bengaluru, the company said in a stock exchange filing. The buyback price implies a premium of 24.5 percent to Friday’s closing price.

The company’s first stock buyback comes as cash and investments rose to Rs 33,565 crore at the end of June, up from over Rs 32,000 crore a year earlier, according to a company presentation.The planned repurchase comes a day after the Bengaluru-based company's chief executive officer and managing director Vishal Sikka called it quits over months of acrimony between the board and a cohort of founders led by ex-chairman N R Narayana Murthy.

The shares plunged 9.56 percent, the biggest drop in over a year, to Rs 923 on Friday, wiping out Rs 24,440 crore of the company’s market value. Most brokerages, and at least one big investor, termed Vishal Sikka’s exit midway his tenure as a negative.

Bhavin Shah, founder, Sameeksha Capital said retail investors are likely to benefit from the buyback price as it should get a higher the acceptance ratio. He expects the buyback to act as a near-term shore for the stock. “We would be a buyer in Infosys at Rs 800-850 levels,” he told BloombergQuint in a phone interview. “…would sell if the stock goes near to the buyback price.” Shah said the bigger concern right is more about client reactions to Sikka's departure.

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First Published : 19 Aug 2017, 01:23:26 PM

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