Infosys Share Buyback: Infosys, the country’s IT sector giant, will consider the buyback of fully paid-up equity shares in its meeting on April 14. This information has been given by the company. This proposal of Boyback is being brought under the market regulator SEBI’s Boy Back of Securities Regulation 2018. Let us know that the March quarter results of Infosys are going to come on April 14.
The meeting of the board of directors of the Bengaluru based company is scheduled to be held on April 13-14, 2021. It will approve and record the financial results of the company and its subsidiaries for the quarter and financial year ended March 31, 2021. Earlier, Infosys had bought 11.05 crore shares worth 8260 crore rupees in August 2019. The company’s first share buyback was worth Rs 13,000 crore in December 2017.
Last week, Infosys’ market cap rose by Rs 23,625.36 crore to Rs 6,13,854.71 crore. In the week ending April 9, Infosys became the fourth Indian company to cross the Rs 6 lakh crore mark in terms of market cap. Infosys shares have grown by 141 per cent in the last one year. Whereas in 2021, this year so far this stock has grown by 12 per cent.
When a company buys its own shares from investors, it is called buyback. You can also consider it the reverse of an IPO. These shares cease to exist after the buyback process is completed. For buyback, mainly two methods – tender offer or open market are used.
The biggest reason for this is the excess cash in the company’s balance sheet. It is not considered good to have too much cash with the company. From this, it is believed that the company is not able to use its cash. The company uses its excess cash through share buybacks. Many times the company feels that its share price is low (undervalued), then it tries to increase it through buyback.
First, the company’s board approves the proposal for share buyback. After this, the company announces the program for buyback. It mentions record date and buyback period. Record debt means that the investors who will hold the shares of the company till that day will be able to participate in the buyback.
The buyback has an impact on the company and its stock in many ways. The number of shares of a company present for trading in the stock market decreases. This increases earnings per share (EPS). The PE of the stock also increases. This does not change the business of the company.
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