The promoters of IT major Infosys will not be participating in the buyback exercise announced last month, the company has said. In a letter to American markets regulator Securities and Exchange Commission (SEC), a copy of which was filed with the Indian exchanges on Wednesday, the company has detailed the buyback process, though the record date for the exercise is yet to be announced.

The buyback regulations under the tender offer route, which applies to this round, allow the promoter and the promoter group the option to participate in the exercise. Promoters of the company include Sudha Gopalakrishnan (2.3%), co-founder Nandan Nilekani (0.98%), and Sudha Murty (0.83%).

Nilekani, his wife and daughter also hold promoter shares in the company. Sudha Murty is the wife of co-founder Narayana Murthy who holds 0.36% stake, and their children Rohan Murty (1.46%) and Akshata Murty (0.94%) hold promoter stakes as well. 

In September, the Infosys board approved the share buyback of up to Rs 18, 000 crore, its largest ever and the first in three years. Through the repurchase the company buying back up to 100 million fully paid-up equity shares of face value Rs 5 each, representing 2.41% of the existing paid-up share capital. 

The buyback price has been fixed at Rs 1,800 per share, a premium to the stock’s recent trading range. The firm’s stock ended Wednesday’s trading at Rs 1,472 per share, up 0.72% from the previous close. Over the past few years, Indian IT giants like Infosys, Wipro, HCLTech and TCS have all tapped the buyback route. 

Wipro announced a Rs 12, 000-crore buyback in 2023 at Rs 445 per share, TCS concluded a Rs 17,000-crore buyback in December 2023 at Rs 4,150 per share. Infosys’ latest buyback size of Rs 18, 000 crore is at par with TCS’ in March 2022 when the market leader had undertaken the exercise.

During the fiscal second quarter earnings call, the Infosys management said that the buyback was in line with the firm’s capital allocation policy. The company intends to steadily increase its annual dividend per share (excluding any special dividends), it said in the SEC filing, adding that in line with the capital allocation policy, the buyback is anticipated to enhance shareholder value over the long term by reducing the equity base.

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