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.
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.
"We've declared Rs 6,400 crore of dividend and Rs 9,200 crore in the buyback. Our cumulative payout for FY21 and FY20, which are the first two years of the capital allocation policy, we would have paid out 83 per cent of the 85 per cent. So in that sense, I think this is completely in line with our policy and that's what the board also considered when deciding the amount of buyback," Infosys Chief Financial Officer Nilanjan Roy told reporters.
Infosys will utilise at least 50 per cent of the amount earmarked as the maximum size for the buyback i.e. Rs 4,600 crore, and purchase a minimum of 26,285,714 equity shares.
The Board has constituted a buyback committee comprising Chief Operating Officer (UB Pravin Rao), Chief Financial Officer (Nilanjan Roy), Deputy Chief Financial Officer, General Counsel and Company Secretary. The buyback is subject to the approval of the members of the company by way of a special resolution and all other applicable statutory/regulatory approvals. The public announcement setting out the process, timelines and other statutory details of the buyback will be released in due course.
In August 2019, Infosys had bought back 11.05 crore of shares under its Rs 8,260-crore buyback offer. It had completed its maiden buyback of Rs 13,000 crore in December 2017, comprising 11.3 crore equity shares at Rs 1,150 per share.