Infosys Ltd, a  IT giant , announced earlier this week that its board would decide on a plan to buy back shares at a meeting on Thursday. At its meeting on October 13, 2022, the company's board will talk about a plan to buy back fully paid-up shares of the company's stock. The company will report its quarterly earnings for the second quarter that ended in September 2022 (Q2 FY23), and the board of the IT company will also discuss its first interim dividend for FY23. "Infosys is likely to announce a cash buyback of between Rs. 8,000 crore to Rs 10,000. As clients have become more cautious, the outlook for revenue growth has slowed. This buyback is a better way to use the extra cash that has been sitting on the books. It should keep the stock price from going down in the short term. The buyback price is likely to be a lot higher than the CMP. In the current economic climate, it seems that the best way to increase shareholder return is to make good use of cash reserves "said Yes Securities, a brokerage firm. During previous buybacks, Infosys's stock went up by 12–21% between the announcement and the end of the buyback. On two of the last three occasions, Infosys's stock did better than Nifty IT. Also, during the last two share buybacks, the stock price reached the maximum buyback price, as noted by the brokerage Jefferies in a note earlier this month. "Therefore, a possible buyback announcement could help Infosys' share price in the short term when there is a lot of uncertainty about the economy as a whole." "it said. The global brokerage expects Infosys to announce a buyback worth 87-95 bn. They also said that Infosys' share buyback should help the price of Infosys' shares when the macroeconomic situation is uncertain. A share buyback, also called a share repurchase, is when a company buys back its own outstanding shares from its current shareholders, usually at a price that is higher than the current market price. It is seen as a different way to give money back to shareholders that saves money on taxes ( Taxes like capital gain tax ) Last year, the Infosys board approved a plan to buy back shares for up to 9,200 crore. This plan began on June 25, 2021. Indian rules say that at least one year must pass between buybacks.

Leave a Reply