Mumbai38 minutes ago
- Copy link
This will be the company’s first and fifth share buyback since 2022 and the listing in 1993.
IT sector company Infosys may soon decide to buy buybacks back. The company will consider the proposal of share buyback in the board’s meeting to be held on September 11.
After this news, the company’s stock is trading at Rs 1,504 on NSE with a gain of 5% today. This will be the company’s first and fifth share buyback since 2022 and the listing in 1993.
Know here answers to questions related to Infosys share buyback …
Question 1: What is Infosys share buyback?
answer: Infosys recently announced that she is considering a buyback of her shares. This buyback is happening for the first time after three years. Buyback means that the company will buy its own shares back from the market, which will reduce the number of shares in the market and increase the value of the share. Its board meeting will be held on 11 September 2025, where the proposal will be decided.
Question 2: How big this buyback is and where will its money come from?
answer: According to reports, Infosys can spend around Rs 13,560 crore for this buyback. The company currently has a cash and cash equivalent of Rs 45,200 crore, which can easily fund this buyback. The company’s total net worth is Rs 95,350 crore and this buyback can be 14-15% of it.
Question 3: What does share buyback mean and why is it done?
answer: In easy language, share buyback occurs when a company purchases its own shares back from investors. There are many benefits of doing this:
- Low shares, more value: The reduced number of shares increases the EPS of every share (EPS), which can lead to the share price.
- Cash use: If the company has excessive cash, then it benefits investors by applying it in buyback.
- Message of confidence: With the buyback, the company shows that it trusts its future and feels that its shares are underwellized.
Question 4: What does this mean for retail investors?
answer: Retail investors, ie people who have shares up to Rs 2 lakh, can be a good chance for them. According to SEBI rules, 15% of the buyback is reserved for retail investors.
For example, in 2017, Infosys kept Rs 1,950 crore for retail investors in a buyback of Rs 13,000 crore. However, investors will have to see whether the price of the buyback is more than the current price of their stock before participating in the buyback.
Question 5: Will buyback increase the share price?
answer: Yes, buyback usually leads to an increase in the share price as the number of shares in the market decreases, which can increase demand. The announcement of buyback shows the company’s confidence, which increases the trust of investors.
The brokerage house like Morgan Stanley believes that Infosys shares can perform better than the NIFTY IT index in the next 60 days. However, some experts say that the share price may fall slightly after the buyback, such as a decline of 3.3% after the buyback in 2021.
Source link
[ad_3]
