Infosys share buyback and special dividend. | Photo Credit: Representative Image New Delhi: Infosys, India's second-largest IT services company, on Friday announced a share buyback programme of Rs 8,260 crore and a special dividend of Rs 4 per equity share while announcing the financial results for the third quarter of the financial year 2018-2019. The board has approved a proposal for the company to buyback the fully paid equity shares of face value of Rs 5 for an amount aggregating up to Rs 8,260 crore, maximum buyback size, Infosys said in a regulatory filing. Infosys has fixed a share buyback price at Rs 800 per equity share (maximum buyback price), 16.89 per cent premium to the Friday’s closing price of Rs 684.35 on National Stock Exchange. “ADS holders are permitted to convert their ADS into equity shares, and, subsequently, opt to sell such equity shares on the Indian stock exchanges during the buyback period,” Infosys said in a statement. Infosys shares closed at Rs 684.35, up 0.68 per cent on NSE on Friday. Infosys, at the maximum buyback price and the maximum buyback size, is aiming to repurchase as much as 10.32 crore (103.25 million) equity shares, comprising 2.36 per cent of the paid-up share capital of the company. Infosys has fixed January 25, 2018 as the record date for the special dividend and January 28, 2019 as the payment date of the special dividend of Rs 4 to all the eligible shareholders. If the equity shares are bought back at a price below the maximum buyback price, the actual number of equity shares bought back could exceed the maximum buyback shares, but will always be subject to the maximum buyback size. Infosys shall utilise at least 50 per cent of the amount earmarked as the maximum buyback size for the share buyback, i.e., Rs 4,130 crore (minimum buyback size) and based on the minimum buyback size and maximum buyback price, the company would purchase a minimum of 5.16 crore (51.625 million) equity shares, Infosys said in an exchange filing.<doc-sep>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. Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.<doc-sep>Dear Reader, Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance. We, however, have a request. As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed. Support quality journalism and subscribe to Business Standard. Digital Editor<doc-sep>Infosys to buy back shares worth Rs 8,260 crore, announces special dividend The company's board also announced a special dividend of Rs 4 per share, amounting to Rs 2,107 crore pay-out, including dividend distribution tax. Atom IT Software major Infosys on Friday said it would buy back its equity shares of Rs 5 face value from the open market at a maximum price of Rs 800 share amounting to Rs 8,260 crore. "Buyback of equity shares from the open market route through Indian stock exchanges, amounting to Rs 8,260 crore at Rs 800 per share after shareholders approve through postal ballot," said the city-based IT behemoth in a statement here. The company's board also announced a special dividend of Rs 4 per share or 80 per cent, amounting to Rs 2,107 crore pay-out, including dividend distribution tax. The second buyback after the first in December 2017 and the special dividend, including distribution tax of Rs 2,633 crore, paid in June 2018, completes the distribution of Rs 13,000 crore as part of its capital allocation policy. "As the dollar-rupee exchange rates moved from April 2018 when the policy was announced, the total capital allocation in dollar terms is $1,872 million, comprising $1,184 million pertaining to buy back, $386 million for special dividend paid in June 2018 and $302 million for special dividend to be paid in January 2019)," said the company in a statement here. The $11-billion outsourcing firm had completed its maiden buyback of 11.3-crore equity shares in December 2017 of Rs 5 face value for Rs 13,000 crore at Rs 1,150 per share. "The buyback of 11,30,43,478 shares was made under the tender offer route from November 30 and closed on December 14," said the company in a filing on December 23, 2017 on the BSE. The company's blue scrip, however, ended at Rs 683.70 on the BSE at the end of Friday trading, gaining Rs 3.95 per share from Thursday's closing price of Rs 679.95 and opening rate of Rs 683.75. Infosys on Friday reported Rs 3,610 crore consolidated net profit for the third quarter of fiscal 2018-19, posting nearly 30 per cent annual decline from Rs 5,129 crore in the same period a year ago. In a regulatory filing on the BSE, the IT behemoth said consolidated revenue for the quarter (Q3) under review, however, grew 20.3 per cent annually to Rs 21,400 crore from Rs 17,794 crore in the like period a year ago.<doc-sep>
New Delhi: Infosys on Friday said it will buyback shares worth up to Rs 8,260 crore and offer shareholders a special dividend of Rs 4 per share as part of the company's Rs 13,000 crore-capital allocation policy. The board has also approved the re-appointment of Kiran Mazumdar Shaw as the Lead Independent Director for the second term from April 1, 2019 to March 22, 2023. Infosys, in a regulatory filing, said its Board has approved buyback of up to 10,32,50,000 equity shares, comprising approximately 2.36 per cent of the paid-up capital of the company as of December 31, 2018 for up to Rs 8,260 crore. The shares, which will be purchased through the open market route via Indian stock exchanges, will be bought for a price not exceeding Rs 800 per share, it added. Also, ADS (American depositary share) holders are permitted to convert their ADS into equity shares, and, subsequently opt to sell such equity shares on the Indian stock exchanges during the buyback period, the filing said. Infosys had completed its maiden buyback of Rs 13,000 crore in December 2017, comprising 11.3-crore equity shares at a price of Rs 1,150 per share. The buyback scheme — a first in the company's over three decade history — had seen participation from Sudha Gopalakrishnan, Rohan Murty and LIC among others. Infosys, in its Friday filing, said the Board has constituted a buyback committee "comprising the Chief Operating Officer, the Chief Financial Officer, the Deputy Chief Financial Officer, the General Counsel and the Company Secretary of the company". The buyback is subject to the approval of the members of the company by way of a special resolution through postal ballot and all other applicable statutory/regulatory approvals. Infosys said it will announce the process, timelines and other statutory details of the buyback in due course. Besides, it has fixed January 25, 2019 as record date and January 28 as the payment date for the special dividend of Rs 4 per share. "After the execution of the above, along with the special dividend (including dividend distribution tax) of Rs 2,633 crore (USD 386 million) already paid in June 2018, the company would complete the distribution of Rs 13,000 crore, which was announced as part of its capital allocation policy in April 2018," it added. As of January 9, 2019, promoter and promoter group held 12.82 per cent share in Infosys, while Indian financial institutions, banks and mutual funds held 12.88 per cent shares. Over 52 per cent shares were held by FII/FPI/ADRs/foreign nationals and OCB, while the remaining 22.21 per cent was held by Indian public, corporates and others.