Mumbai: The Infosys Board on Saturday announced a share buyback programme of up to Rs 13,000 crore, a day after Vishal Sikka resigned as chief executive after a long-running feud with the company’s founders.
The Bengaluru-headquartered Infosys, India’s second biggest IT firm, said it would buy back shares up to Rs 13,000 crore at a fixed price of Rs 1,150 each. The company plans to buy back 113 million shares, or 4.92% of its equity capital, moneycontrol.com reported.
The free fall in Infosys stock had erased Rs 27,000 crore of shareholder value on Friday as investors dumped the stock and headed for the exit doors. The fall in the scrip had topped 10% and broke the lower circuit, which stopped the trade of Infy shares on the exchange briefly.
The company said given the significant shareholding of the US residents by way of ADS’ and equity shares, it was necessary to obtain exemptive relief from the American market regulator US SEC on certain aspects of the tender offer procedures.
This is due to conflicting regulatory requirements between Indian and US laws for tender offer buybacks and the same has been obtained, Infosys explained.
The share buyback — the first in the company’s 36-year history — has been a long-standing demand by some of the founders and high-profile former executives, who have been pushing Infosys to return surplus capital to its shareholders.
While Pravin Rao, currently chief operating officer, has been named interim CEO, Sikka will become executive vice-chairman and will be paid $1 in annual salary. Sikka will help the company search a new MD and CEO and the deadline has been set for March 31, 2018.