Infosys informed the stock market that on the first day of the offer, Infosys subscribed equity shares worth approximately Rs 202 crore on the exchanges.
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Infosys Buyback Offer: Shares of IT giant Infosys after launch of buyback offer Infosys Share Price are in focus. On Thursday, the business of the fourth largest company in terms of market share was largely flat. The share buyback of Rs 9,300 crore began on December 7 and will continue till June 6, 2023.
The company told the stock market that on the first day of the offer, Infosys bought equity shares worth approximately Rs 202 crore on the exchanges. At around 10 am, Infosys stock was trading marginally higher at Rs 1,606.70 from the previous close of Rs 1,605.05 on BSE. Infosys market cap at current value levels (Infosys Market Cap) 6.77 lakh crore is close to Rs.
Bought shares worth more than 200 crores on the first day
On Wednesday, in a regulatory filing, Infosys disclosed that the company bought back 25,000 shares on BSE and 12.23 lakh shares on NSE at an average price of Rs 1,615.54. The total number of shares bought on the first day was about Rs 201.62 crore at an average price of Rs 12.48 lakh on the stock exchanges. Kotak Securities was the broker for the transaction. The total buyback offer of Infosys will be over 5.02 crore equity shares of face value of Rs 5 each, amounting to Rs 9,300 crore. The buyback price should not exceed Rs 1,850 per share. The company will implement this buyback through its free reserves.
50 percent of buyback will be used like this
Of the total buyback size, Infosys proposed to use at least 50 per cent of the maximum buyback, which would be Rs 4,650 crore. As of September 30, 2022, Infosys has free cash flow of Rs 4,752 crore as compared to Rs 5,106 crore in Q1FY23. Further, its consolidated cash and investments stood at Rs 38,921 crore in Q2 FY2023 as against Rs 34,854 crore in Q1 FY2022.
What is the benefit to the company
According to Infosys’ notice, the buyback will help the company return surplus cash to its shareholders. In the normal course, buybacks are expected to improve return on equity through distribution of cash and, over the long term, reduction in equity base improves earnings per share, thereby enhancing long-term value for members. Also, buyback gives an opportunity to the shareholders to increase the percentage of their stake in the company.
How to participate in Infosys share buyback?
Last month, ICICI Direct in its blog on Infosys share buyback had said that since the buyback is open market, no special participation is required. Any equity shareholder holding Infosys shares in his demat account is eligible to participate in the buyback. In case, a shareholder is planning to participate in the buyback, they only need to inform their broker about the equity shares they wish to sell.
The broker places a sell order whenever the company places a buy order under the buyback plan. According to ICICI Direct, the trade will be executed at or below the offer value only if the price placed by the shareholder matches the buy order placed by the company.
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