No change in buyback plans, says Infosys

The board of Infosys, which saw its CEO Vishal Sikka step down on Friday amid founders alleging corporate governance lapses, is scheduled to meet on Saturday to consider the buyback proposal.

Infosys on Friday said there is no change in its buyback plans, under which it could return as much as Rs 13,000 crore to its shareholders.

Infosys employees share a lighter moment during a break at the company headquarters in Bangalore. Infosys CEO Vishal Sikka, has resigned following differences between him and some founders of the company, including Narayana Murthy. (AP Photo)

The board of the embattled company, which saw its CEO Vishal Sikka step down on Friday amid founders alleging corporate governance lapses, is scheduled to meet on Saturday to consider the buyback proposal.

“There is no change in buyback plans. We have made a commitment on how much and when to return cash to shareholders,” Infosys board chairman R Seshasayee said at a conference.

The share buyback -- which will be the first in the company’s 36-year history -- has been a long-standing demand by some of the founders and high-profile former executives, who have been pushing Infosys to return surplus capital to its shareholders.

“None of the things that have been set in motion... will be stopped,” Seshasayee said responding to a specific question on the fate of the buyback amid the high-profile departure of the CEO.

There are concerns that the investor sentiment could take a beating following the ugly and public spat between the founders and the management of India’s second largest software exporter.

The Infosys stocks plunged 9.56% to close at Rs 923.50 a share.

The Bengaluru-based company in April had announced that it will pay up to Rs 13,000 crore to shareholders during the current financial year through dividend and/or share buyback.

The company has not yet outlined the details of the proposed share buyback.

Share buybacks typically improve earnings per share and return surplus cash to shareholders, while also supporting share price during period of sluggish market condition.

Infosys had cash and cash equivalents worth over $3.5 billion on its books as of June 30, 2017.

A number of tech companies have announced share buyback programmes this year to offer rich returns to shareholders.

While Infosys’ larger rival TCS offered Rs 16,000-crore mega buyback offer to shareholders, rivals like Cognizant, Wipro, HCL Technologies and Mindtree have also made similar announcements.