The share buyback issue announcement by Infosys once again brings back the focus on the promoters with the question on how they would participate in this programme given the background of their uneasy relationship with the company’s Board and management. The details on the proposed buyback will be known on Saturday following the company’s board meeting to discuss the buyback proposal. Infosys has already announced its intention of disbursing up to Rs 13,000 crore back to the shareholders. The promoters – N R Narayana Murthy, Nandan Nilekani, S Gopalakrishnan, S D Shibulal and K Dinesh – together hold 12.75% stake in Infosys at the end of June, 2017, according to filings with the stock exchanges.
E-mail queries sent to Murthy and Nilekani on whether thessy would participate in the proposed buyback did not elicit any response while Gopalakrishnan responded with a comment that he does not comment on Infosys.
The promoters, especially Narayana Murthy has been quite vocal in expressing his disappointment on certain decisions taken by the Infosys Board and also raised certain questions on the company’s corporate governance practices.
Though the Infosys Board denied any lapses on the corporate governance, it recently formed a committee of directors to ensure stronger alignment between them and the company’s management led by CEO Vishal Sikka.
There were reports in the section of the media that some of the promoters might look at selling their stake in the company in tranches over a period of time. Even as the Infosys Board has consistently denied any breakdown in the communication with the promoters and they being aligned to company’s strategic objectives.
Now, it remains to be seen on how the promoters will participate in this buyback issue and whether there will be any change in the shareholding structure. Though observers believe, it is very unlikely as the Rs 13,000 crore of the capital disbursal programme represents around 5% of the total market capitalisation of Infosys making it a smaller sized issue.
On the participation of the promoters in the proposed buyback, a person familiar with the promoter group said, “It is a billion dollar question and one really does not know how they would participate.”