Infosys share buyback is all set to open on Thursday, 30 November 2017, after India’s second largest IT company Infosys announced 1 November as the record date for the repurchase of shares.
Infosys share buyback is all set to open on Thursday, 30 November 2017, after India’s second largest IT company Infosys announced 1 November as the record date for the repurchase of shares. In the Infosys buyback offer, all the investors who held Infosys shares as on 1 November 2017 are eligible to participate in Infosys buyback process. The record date for Infosys buyback was announced on 10 October 2017. The second largest IT company — Infosys — is coming up with the second largest share buyback in the history of Indian stock markets. Earlier in May 2017, India’s largest share buyback to date was offered by the country’s largest IT company — Tata Consultancy Services.
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 is buying about 11.3 crore shares at a price of Rs 1,150 per equity share which is at a 17% premium from its current market price of Rs 983. Infosys would be spending a whopping amount of Rs 13,000 crore in order to purchase back 4.92% of its equity. Infosys’ huge share buyback offer is just shy of the biggest IPO (initial public offering) in India worth Rs 15,200 crore by Coal India Ltd in 2010.
The two-week long Infosys share buyback process from 30 November to 13 December is likely to improve earnings per share of the company with an opportunity to return unutilised and surplus cash to shareholders. Infosys’ share buyback will be the first in the company’s 36-year long history. Infosys share repurchase is managed by Kotak Mahindra Capital Company and JPMorgan India.
In the 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. In May 2017, India’s largest IT firm Tata Consultancy Services completed its share repurchase worth Rs 16,000 crore, making it the largest ever share buyback in Indian corporate history.
Infosys’ mega buyback of Rs 13,000 crore may also see its promoters selling their shares. Reportedly, NR Narayana Murthy would offer about 7.2 lakh shares while Nandan Nilekani would tender 21 lakh shares. If all the shares are accepted, it would mean that Nandan Nilekani will get Rs 241.5 crore from the first buyback of Infosys ever.