Infosys' share buyback offer worth Rs 9,300 crore began on Wednesday. The country's second largest information technology company is planning to buy back shares at Rs 1,850 per share which is 15 per cent higher than its Wednesday's closing price.
The company is buying back over 5 crore shares representing 1.19 per cent of total paid up capital through the open market route. The company conducted its first share buyback of Rs 13,000 crore in December 2017 through the tender offer route. The buyback price was kept at Rs 1,150 per share.
The cash-rich company announced Rs 8,260 crore share buyback in 2019 through the open market route at buyback price Rs 747.38 apiece.
The buyback will be carried through the open market route. Also, Infosys has allowed American Depositary Shares to convert their ADS into equity shares, brokerage firm ICICI Direct aid in a blog.
Since the buyback is of the open market there is no special participation required. Any equity shareholder holding the shares in Demat form can participate in the buyback offer through their stockbroker, ICICI Direct said.
The shareholder needs to inform his/her broker on the details of the equity shares they wish to sell. The broker will place a sell order whenever the company places a buy order for the buyback. The trade would get executed at the offer price or lesser only when the price offered by the shareholder matches with the buy order placed by the company.
Infosys had sought shareholders' nod for Rs 9,300 crore share buyback between November 3 to December 2 through postal ballot.
The Infosys board on October 13 had announced a share buyback of Rs 9,300 crore via the open market route, for a price not exceeding Rs 1,850 per equity share.
"...the Company is required to obtain the approval of its Members for the Buyback by way of a special resolution through Postal Ballot or at a general meeting by providing the facility to Members to vote by electronic means. Accordingly, the Company seeks your approval for the Buyback through this Postal Ballot Notice," the filing said.
The board decided to return approximately 85 per cent of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends, share buyback, special dividends etc.
