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  1. India’s 2nd largest share buyback: Infosys asked for 11.3 crore shares, investors offered 56.5 crore

India’s 2nd largest share buyback: Infosys asked for 11.3 crore shares, investors offered 56.5 crore

The second-largest buyback of India's second-largest IT company Infosys concluded on Thursday with investors tendering more than 5 times the shares offered by the company.

By: | Published: December 14, 2017 5:19 PM
In two-week-long share repurchase from 30 November to 14 December, shares of Infosys has advanced about 3%. (Image: Reuters)

The second-largest buyback of India’s second-largest IT company Infosys concluded on Thursday with investors tendering more than 5 times the shares offered by the company. In the mega shares repurchase of Infosys, shareholders tendered more than 56.53 crore shares against the company’s offer of 11.3 crore shares, according to the data available with stock exchanges. Infosys, as being one of the oldest IT company in India, received as many as 2.06 lakh shares in physical form, even as dematerialisation process was started more than 20 years ago. Infosys’ Rs 13,000 crore share buyback was India’s second-largest buyback after Tata Consultancy Services’ Rs 16,000 crore offer. Infosys share repurchase is managed by Kotak Mahindra Capital Company and JPMorgan India.

Infosys has a large cash pile of about Rs $5 billion out of which about $2 billion would be spent in buying back the shares. In the Infosys buyback process, Infosys offered to buy about 11.3 crore shares at a price of Rs 1,150 per equity share which is still at a premium of 13.58% from its current market price of Rs 1012.45. In two-week-long share repurchase from 30 November to 14 December, the share price of Infosys has advanced about 3%. In Infosys share buyback program, 15% of the offer size, which is about Rs 1,950 crore, out of the total size of Rs 13,000 crore is reserved for small shareholders who held shares worth up to Rs 2 lakh on the record date, according to SEBI guidelines.

Until yesterday, about 45.89 crore shares were tendered, implying 4.06 times. Infosys’ share buyback is first in the company’s 36-year long history. Through this buyback, Infosys has attempted to purchase back about 4.92% of its equity. Infosys’ huge share buyback offer was just shy of the biggest IPO (initial public offering) in India which is worth Rs 15,200 crore by Coal India Ltd in 2010. Earlier in May 2017, India’s largest share buyback to date was offered by the country’s largest IT company — Tata Consultancy Services.

Meanwhile, another share buyback of India’s third-largest IT company Wipro which ended with a huge participation on Wednesday. Against buyback offer of 34.37 crore shares, about 3.4 times shares were tendered by investors in the two-week long share repurchase from 29 November to 13 December. Wipro’s latest buyback offer followed its another large share buyback of Rs 2,500 crore that was exercised in May 2016. Rs 11,000 crore share repurchase of Wipro which is also India’s third-largest was managed by JM Financial Institutional Securities.

Wipro offered to repurchase about 34.37 crore shares at a floor price of Rs 320 per equity share. Against the size of 34.37 crore shares, about 116.41 crore shares have been tendered by the investors all across, implying 3.39 time of the total offer. Shares of Wipro have lost about 2.59% to Rs 287.2 in the two week period of the buyback. According to Wednesday’s closing price of Rs 287.2, the floor price of Rs 320 was still at a premium of 11.42%.

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