The company will buy back up to 11,30,43,478 crore shares at a price of Rs 1,150 per equity share.

Day after Vishal Sikkas exit Infosys announces Rs 13000 crore share buyback
Atom Infosys Saturday, August 19, 2017 - 12:30

A day after India’s second largest IT firm Infosys saw its MD and CEO resign, the IT major has announced a Rs 13,000 crore share buyback on Saturday of Rs 5 face value at Rs 1,150 per share via a tender offer.

According to a BSE filing, the size of the buyback offer is 20.51% of the total paid-up equity capital and free reserves of the company.

The company will buy back up to 11,30,43,478 crore shares which amount to 4.92% of the paid-up equity share capital of the company and this will be at a price of Rs 1,150 per equity share.

According to a report in the Economic Times, At Rs 1,150, the buyback price is set at 25 per cent premium over Friday's closing of Rs 923.10 on BSE.

As per the company’s BSE filing, the buyback price represents a premium of 19.08% an 18.70% over the volume weighted average market price of the stock on BSE and NSE over the last three months.

ET reports that 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. Data showed the company had cash in excess of $6.1 billion and analysts told ET that this would come down by one-third after the payouts. 

Prior to this, Tata Consultancy Services (TCS) also announced a buyback of Rs 16,000. Wipro too, paid back Rs 11,000 crore along with HCL Tech, which approved a buyback of Rs 3,500 crore.

This announcement by Infosys comes a day after Vishal Sikka resigned as the MD and CEO of the company following a constant ‘drumbeat’ of allegations against him and the board.

He will continue as the executive vice chairman of the company while COO UB Pravin Rao has taken over as the interim MD and CEO until the company appoints a new person for this role. The board of Infosys has already formed a committee to look for Vishal Sikka’s successor and has said a new MD and CEO will be appointed before March 31, 2018.

The stock market, however, doesn’t seem to have taken the news of Sikka’s resignation very well. The stock plunged by about 10% on Friday wiping off nearly Rs 22,000 crore from the company’s market cap.

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