Infosys share buyback soon? What IT behemoth has to say about up to Rs 10,400 crore plan

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Updated: December 27, 2018 5:14:10 PM

After media reports indicated that Infosys may soon come out with a $1.6 billion share buyback programme, the IT behemoth has said that its board has identified about Rs 10,400 crore to be paid out to shareholders in FY19. We take a closer look.

Infosys board had decided to pay off Rs 13,000 crore and a special dividend of Rs 10 per share, as part of its plan to payout up to 70% of its free cash flow every financial year.

After media reports indicated that Infosys may soon come out with a $1.6 billion share buyback programme, the IT behemoth has said that its board has identified about Rs 10,400 crore to be paid out to shareholders in FY19. Notably, on April 13th, Infosys board had decided to pay off Rs 13,000 crore and a special dividend of Rs 10 per share, as part of its plan to payout up to 70 per cent of its free cash flow every financial year. Further, the board had decided an amount of up to approximately Rs 10,400 crore to be paid out to shareholders for the Financial Year 2019, in such a manner, to be decided by the Board, subject to applicable laws and requisite approvals, if any.

“We draw your attention to the Capital Allocation policy approved by the Board of Directors in their meeting held on April 13, 2018. The Board decided to retain the policy of returning up to 70% of the free cash flow of the corresponding Financial Year in such manner, as may be decided by the Board from time to time, subject to applicable laws and requisite approvals, if any,” Infosys said in a statement to the exchanges.

Also read: Investing tips for 2019: Five key things to keep in mind while investing in SIPs

While there is increased buzz around the buyback, Infosys has not yet disclosed the manner of payout. “In line with the above Capital allocation policy, the Board from time to time will decide the manner of returning the identified amount subject to applicable laws and requisite approvals, if any. Further, we would like to clarify that the Company is aware of its obligations under Listing Regulations and will make appropriate disclosures in a timely manner,” Infosys added. Infosys share price gained by more than 2.9% intra-day to Rs 663.25 on Thursday.

Currently, Infosys commands a market capitalisation of about Rs 2.81 lakh crore. The IT major completed 25 years of stock market listing in June-2018. Interestingly, in the 25-year long listing history, Infosys has never missed distributing dividends since the year 2000, according to data available with BSE.

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