Infosys Buyback: Approval For Shares Worth Rs 9,200 Cr Upto Rs 1,750 Per Share Apr 15, 2021, 13:05 IST
Infosys Ltd. has announced a buyback plan with the Board approving the proposal worth Rs 9,200 crore. The company also announced the earnings for the quarter ending in March and fiscal year 2021. Infosys in a regulatory filing said that shares will be bought back via the open market route through the stock exchanges.
The buyback will be done at a price of up to Rs 1,750 per share through the open market route. The Bengaluru-based company had enhanced its capital allocation plan from FY20 and said it will return 85 per cent of free cash flow cumulatively over five years via buyback and dividends.
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Infosys buyback price fixed at Rs 1,750 apiece
IT major Infosys has announced a buyback plan. The board has approved a plan up to Rs 9,200-crore wherein the company will buy back shares from the investors. Infosys in a regulatory filing said that shares will be bought back via the open market route through the stock exchanges.
The buyback price has been fixed at a maximum price of Rs 1,750 apiece.Â
The plan is a part of Infosys capital return of Rs 15,600 crore, which also includes a final dividend of Rs 6,400 crore. The Bengaluru-based company had enhanced its capital allocation plan from FY20 and said it will return 85 per cent of free cash flow cumulatively over five years via buyback and dividends.
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WHAT IS A BUYBACK?
A buyback is an option for repurchasing free-float equity shares of a company by promoters. The company pays its shareholders a fixed value per share and takes back equity shares, which were distributed among public and private investors, as part of its ownership.
It may be noted that the buyback is beneficial for investors as the company pays a higher price for equity shares than the market value.
There are various reasons why companies opt for buybacks including plans to consolidate ownership, increasing key financial ratios and strengthening company finances.
Infosys has already announced two buybacks in the past and this will be the third one. In 2017, the company conducted its first buyback of shares, returning Rs 13,000 crore to investors at Rs 1,150 per share. Infosys conducted its second buyback in 2019 at Rs 800 per share.
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Indian IT major Infosys will consider a share buyback plan in its board meeting scheduled on April 14. The Board of the Company will consider a proposal for buyback of fully paid-up equity shares of the Company at its meeting to be held on April 14, 2021, in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018, the company said in a regulatory filing.