Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / Company-results/  Infosys goes for its second share buyback
BackBack

Infosys goes for its second share buyback

At its maximum price and size, the buyback will include 103.250 million shares, comprising around 2.36% of the company's paid-up capital on a standalone basis

Infosys concluded its first share buyback in December 2017. Photo: Hemant Mishra/MintPremium
Infosys concluded its first share buyback in December 2017. Photo: Hemant Mishra/Mint

New Delhi: The Infosys board on Friday approved a share buyback for up to 800 a piece, which will cost the company around 8,260 crore. This is the second share buyback in the company’s history. The first was in December 2017. A company can do a share repurchase only once a year. That moratorium ended last month for the company.

At its maximum price and size, the buyback will include 103.250 million shares, comprising around 2.36% of the paid-up capital of the company on a standalone basis. The company’s equity comprises 4.36 billion shares.

Infosys’ first buyback, at 1,150 per share, had returned around 13,000 crore to shareholders.

In April 2018, Infosys had outlined its capital allocation policy under which it said it intended to return its shareholders 2,600 crore in dividend and another 10,400 crore through other means, including a buyback.

All big IT companies like Tata Consultancy Services (TCS), HCL Technologies (HCL) and Wipro announced large share buybacks in the last two years.

A share buyback is generally not looked at favourably by investors since it indicates lack of opportunities for the company to utilise cash more effectively. The company, faced with few opportunities to deploy cash and mindful of the fact that a large pile sitting on the books drags down return on equity and hence shareholder value, finds it better to return money to shareholders.

In markets such as the US and Europe, large institutional investors do not take kindly to companies sitting on cash and often force them to return money to shareholders through such exercises.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 11 Jan 2019, 04:55 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie