An overwhelming majority of the 19-member promoters category of Infosys will participate in the company’s Rs 13,000 crore share buyback programme which also includes N R Narayana Murthy and Non-Executive Chairman Nandan Nilekani, according to notices issued to the stock exchanges by the company. The three members who will not participate in the share buyback issue are S D Shibulal, Shruti Shibulal and Meghana. The promoters collectively hold 12.75% stake in Infosys and they have expressed their intention to participate in the buyback and may tender upto a maximum of 1,77,29,998 shares.
The total number of shares to be offered for the buyback is 11,30,43,478 accounting for 4.92% of the paid-up equity share capital at a price of Rs 1,150 per share. The buyback process will be through the tender offer route. The voting process for the shareholders approval will begin on September 8 and end on October 7. Earlier, there were question marks on whether the founders of Infosys would participate in the buyback given its strained relationship with the previous Board led by chairman R Seshasayee and then CEO Vishal Sikka.
According to the stock exchange notice, the aggregate paid-up equity share capital and free reserves as on June 30, 2017 on a standalone and consolidated basis is 63,386 crore and 67,413 crore, respectively. Under the provisions of the Act, the funds deployed for the Buyback cannot exceed 25% of the total paid-up standalone equity share capital and free reserves of the Company i.e. Rs 15,847 crore.
This is the first ever buyback from Infosys. The company’s earlier policy was to pay dividends of up to 50% of post-tax profits of the financial year. Effective from financial year 2018, the Company expects to payout up to 70% of the free cash flow of the corresponding financial year in such manner (including by way of dividend and /or share buyback) as may be decided by the Board.