The share price of Infosys hit a 52-week high as the company announced a share buyback programme, and the IT company said it would consider the proposal during its board meeting on April 14.
In a notice to the stock exchanges, Infosys said,
“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, in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018.”
In anticipation to the proposed buyback, the share price of Infosys rose by two percent in early Monday morning trade to touch a 52-week high of Rs 1,480.
Infosys had conducted two share buybacks in the past. In 2017, the company had announced a Rs 13,000 crore buyback at a price of Rs 1,150 per share. In 2019, it followed up with a Rs 8,260 crore buyback programme at a share price of not exceeding Rs 800 per share.
According to reports, the latest share buyback issue of Infosys could be in the range of Rs 10,000-12,000 crore at a price of Rs 1,650-1,670 per share.
Infosys will also announce its fourth quarter results on April 14. According to brokerage house ICICI Securities, it expects Infosys to report 4.5 percent quarter-on-quarter increase in revenues in constant currency terms mainly led by traction in cloud migration, the ramp-up of deal wins. The company is also witnessing a healthy deal pipeline.
Brokerage house Prabhudas Lilladher believes the IT sector will maintain its strong performance in FY22 given the sector’s entry in technology upcycle, digital going mainstream, strong order book and deal pipeline, accelerated demand for cloud adoption and broad-based demand across all industry verticals.
Share buybacks have increasingly become a instrument by Indian IT companies to return wealth back to the investors. The peers of Infosys – TCS, Wipro, and HCL Technologies have also undertaken share buyback programmes in the past.