Infosys announces Rs 13,000 crore share buyback at Rs 1,150 per share

NEW DELHI: Infosys, India's second largest IT firm, announced a Rs 13,000 crore share buyback on Saturday, a day after CEO and MD Vishal Sikka resigned following a 'misguided' campaign - as the company's board called it - by none other than the company's co-founder NR Narayana Murthy.

The company would buy back up to 11,30,43,478 crore shares aggregating up to 4.92% of the paid-up capital via tender route at a price of Rs 1,150, Infosys said in a BSE filing.

The IT major had in April said that it would pay back to Rs 13,000 crore, or $2 billion, through dividends and share buybacks in FY18.

How Vishal Sikka turned around Infosys in three years

When Vishal Sikka took over the reins of Infosys three years ago, the company was in disarray , hit by a regular exodus of top executives, lagging growth compared to its industry peers, low employee morale and a high level of attrition.

Data showed the company had cash in excess of $6.1 billion, which analysts said would come down by one-third after the payouts.

Recently bigger peer TCS announced a Rs 16,000 crore share buyback, while Wipro paid back Rs 11,000 crore. HCL Technologies, the fourth largest IT firm, has also approved buyback of up to 3.50 crore shares for Rs 3,500 crore.

Foreign brokerage CLSA said high payouts in TCS' recent share buybacks have led to enthusiasm about similar trends repeating, but low promoter shareholding, whose tendering is restricted, may limit the upside.

Brokerage Edelweiss Securities said the buyback will provide downside support to the stock, but an early appointment of a new CEO will be an upside risk.