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Should Infosys Go Ahead With Share Buyback?
Excerpts
THE BUYBACK DEMAND
In 2012, Infosys investors came up with a buyback demand, citing the sluggish financial performance and huge cash pile as reasons. During the annual shareholders’ meeting in 2012, Kotak Institutional Equities demanded that the extra cash be returned to investors in the form of buyback. They argued that with idle cash of more than US $ 3.15 billion, consistent free cash flows, and no track record of aggressive acquisitions, Infosys should return money to the shareholders. Analysts Saluja, Chordia and Shyam of Kotak said in 2012, “We see a lot of merit in the company pursuing a structured buyback program as opposed to letting the excess cash sit idle on the balance sheet, awaiting that elusive large, ‘palatable to the company’, acquisition,”... |
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THE BUYBACK DEBATE
When news of the buyback demand reached the market, Infosys shares jumped by as much as three percent. It kicked off a debate in the market, with some experts supporting the demand and others opposing it...
COMPANY’S RESPONSE
In response to the letter, the company said, “The Infosys board and the management receive requests on a variety of subjects from shareholders and investors on an on-going basis. These are addressed in due course. Should there be any development that will impact our shareholders, we will immediately inform the regulatory bodies and shareholders on priority,”..
EXHIBITS
Exhibit I: Key Events of Infosys Ltd (1981-2014)
Exhibit II:Balance Sheet and Profit and Loss Information of Infosys Ltd
Exhibit III: Key Ratios and other Financials of Infosys Ltd.
Exhibit IV: Peer Performance as on 1st April 2014
Exhibit V: Share Buyback In India
