Investors in Infosys have finally got a news to cheer. Amid the news of CEO resigning and US law firms planning investigations against the company, the board has confirmed the share buyback which was being highly talked about. Giving its approval to the pending buyback program, the board has announced to buyback shares worth ₹13000 crores at a price of ₹1150 per share.
In a BSE filing today, Infosys stated that the company will buyback 11,30,43,478 shares from the investors. This includes 4.92% of the paid up equity capital. Talking of the overall scenario, the buyback share size comes to around 20.51 percent total paid-up equity capital and reserves held by the company.
The buyback comes as a big relief to a lot of investors who were shaky about the future of Infosys stock. However, this comes with over 25% premium on the last traded price of Infosys share on Friday. Also, the buyback price will give 10% premium on the average trade price of Infosys share in last 3 months.
In April, the company had announced its plans to buyback shares worth ₹13000 crores ($2 Billion). According to the BSE filings, Infosys currently has around ₹40,000 crores ($6.1 Billion) in cash. The cash amount held by Infosys is set to come down one-third once the buyback completes.
Other players in the same sector have also announced buyback and that had prompted Infosys to go with this decision. Recently, TCS announced a share buyback worth ₹16000 crores and Wipro had announced share buyback worth ₹11,000 crores. HCL Tech had also bought back shares recently worth ₹3500 crores.
Brokerage firm Edelweiss Securities will provide its support to Infosys in completing this transaction.