Infosys gets near 500% response to buyback

Infosys, India’s second largest IT services company, said it received 499.98 per cent higher response to the proposed share buyback plan.

The Bengaluru-headquartered company had in August announced a Rs 13,000 crore share buyback plan and promised to repurchase more than 113 million equity shares aggregating up to 4.92 per cent of the paid-up equity share capital at a price of Rs 1150 apiece.

It received applications for tendering more than 565 million equity shares, nearly five times more than reserved number of shares in the buyback, said Infosys in a notification to the USSEC.

The company repurchased 1.39 million and 1.5 million from Rohan Murthy and Sudha Gopalakrishnan, respectively, amongst the promoters of the company. Post buyback, the promoters will hold 12.90 per cent of Infosys total equity shares.

Infosys is the third IT services firm to receive higher subscription share buyback. While Wipro saw 341 per cent higher subscription, TCS reported nearly 221 per cent higher response against its buyback plan.

This means shareholders of these IT companies tendered more number of shares than they were entitled to.

Analysts tracking the IT stocks said even though the sector has been profitable, but it is seeing a slow-paced growth of late because of the structural changes in revenue model.

“Investors have reduced confidence in IT stocks. If investors were confident of Wipro and believed that the company would face all the future challenges then they would given a high rate and preferred to sell it in the market only,” said one of the analysts.