IT services major Infosys on Sunday said its board will consider a buyback proposal at its meeting on Wednesday.
“The board of the company will consider a proposal for buyback of fully paid-up equity shares of the company at its meeting to be held on April 14, 2021, in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018,” Infosys said in a regulatory filing.
The outcome of the board meeting will be disseminated to the stock exchanges after conclusion of the board meeting on April 14, it added.
The board of the Bengaluru-based company is slated to meet on April 13 and 14, 2021, to approve and take on record the audited consolidated financial results of the company and its subsidiaries for the quarter and year ended March 31, 2021.
In August 2019, Infosys had bought back 11.05 crore of its shares under its Rs 8,260-crore buyback offer.
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.
Buyback refers to the repurchasing of free-float shares of a company by the promoters. In a buyback issue, the company pays its shareholders a fixed value per share and re-absorbs that portion of its ownership previously distributed among public and private investors.
The process enables the repurchase of shares from shareholders, usually at a higher price than the market price.
Companies go for buybacks for various reasons such as ownership consolidation plan, undervalued price or for boosting its key financial ratios, making companies look more healthy financially.
Infosys share price touched 52-week high of Rs 1,48, rising over 2 percent in the early trade on Monday.
The corporate earnings for the fourth quarter of fiscal 2021 are all set to begin with the IT companies kicking in the season. In the last two consecutive quarters, companies have beaten street expectations and earnings estimates have been raised.
Analysts expect companies to report strong results again this quarter. During the quarter ended March 2021, the Nifty IT index has outperformed the benchmark Nifty and experts believe this outperformance to continue in the medium term. Strong demand environment, large deal wins, continued traction in digital and cloud, ramp-up of large deals and demand recovery in highly impacted verticals like travel, hospitality were the highlights of the quarter gone by for the Indian IT companies.
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