BENGALURU: Infosys will consider a proposal for share buyback in its board meeting on Saturday, the company has said in filing to the Bombay Stock Exchange (BSE). For months now, speculation has been rife about the IT major going for a buyback of its equity shares. The Bengaluru-based firm had recently adopted new Articles of Association, including provision for buyback.
Share buyback is a process where a company repurchases its stock, reducing the number of shares of the company available in the market. Companies usually resort to buyback to increase the value of their shares.
In its BSE filing, Infoys stated, “We would like to inform you pursuant to Regulation 29 (1)(b) of the Sebi (Listing Obligations and Discourse Requirements) Regulations, 2015, that the board of directors of Infosys Limited will consider a proposal for buyback of equity shares of the company at its meeting to be held on August 19, 2017.” The result would be announced to the stock exchange soon after the meeting on that day.
Company Secretary A G S Manikanta added that the company had closed the trading window with immediate effect and the trading window will reopen on August 22.
Apurva Prasad, research analyst, HDFC Securities, told Express that this would be a positive move for the company. “This is something that the company had called out earlier. They had earmarked Rs 13,000 crore, which was to be paid out this year either in the form of dividend or buyback. It is pretty much in line with what the company has been talking about.”
According to Prasad, this would bring about better cash utilisation for Infosys. The overall capital allocation strategy for Indian IT companies have improved and Infosys buyback is in sync with that, he added.
Recently, Tata Consultancy Services had completed share buyback of Rs 16,000 crore. Wipro, another Bengaluru-based IT company had announced its intentions for share buyback earlier this year.