Infosys share buyback may see founders sell some stake
Bengaluru: Infosys founders are likely to sell some of their stake in the company’s Rs13,000-crore share buyback programme, the company said on Monday.
The keenness of the promoters to participate in the share buyback comes within days of a silent coup by founders led by N.R. Narayana Murthy to seize control of India’s second-biggest software services firm. When contacted, Murthy declined to comment on whether he would participate in the share buyback.
The Infosys founders and their families between them hold about 12.75% (29.28 crore shares) of Infosys.
The share buyback price of Rs1,150 is higher than the current stock trading price of Rs941.15 and is considered “reasonably good” by the firm’s former CFO V. Balakrishnan.
Founded in 1981 by seven engineers—all former employees of Patni Computer Systems—with an initial capital of $250, Infosys Ltd has grown into an over $10 billion company.
“In terms of share buyback regulations, under the tender offer route, the promoters have the option to participate in the buyback. We would like to inform...that some of the members of the promoter and promoters group of the company have communicated their intention to participate in the proposed buyback,” Infosys said in a BSE filing.
The company, however, did not give details.
The announcement comes days after an upheaval at the Infosys board, which first saw the company’s first non-founder CEO Vishal Sikka quit. Infosys co-founder Nandan Nilekani has been appointed the non-executive chairman, a move that led to resignation of four board members including chairman R. Seshasayee.
Infosys has said that the share buyback is subject to approval of shareholders through a special resolution and the announcement on the modalities such as process and timeline will be “released in due course”.
On August 19, a day after Sikka’s resignation, the Infosys board approved the share buyback plan of up to Rs13,000 crore to reward shareholders. The company plans to buy back 11.3 crore shares at Rs1,150 apiece.
Infosys’s first-ever buyback is second only in terms of size to the Rs16,000 crore share repurchase by its bigger rival Tata Consultancy Services Ltd (TCS) announced in April this year.
On Monday, Infosys shares gained 3.14% to end at Rs 941.15 on the BSE.
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