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News Topical, Digital Desk : The country's leading IT company Infosys has announced a share buyback of Rs 18,000 crore on Thursday, September 11. The company will buy 10 crore shares at a price of Rs 1,800 per share. This decision was taken in the board meeting. But what does this mean for the company's 26 lakh shareholders? Let's know the 5 most important things.
What is a share buyback?
In a buyback, the company buys back its shares from the market so that money can be returned to the shareholders. This can increase the share price and improve the value of the company.
5 most useful things for shareholders
1. Method of buyback: The company is buying shares through tender offer. In the tender offer, shareholders get a chance to sell shares at a fixed price (which is usually higher than the market price).
2. Price and premium: The buyback price is Rs 1,800 per share, which is higher than the current market price. This can benefit the shareholders. They can sell their shares at a higher price.
3. Past performance: Infosys' last buyback was of Rs 9,300 crore in 2022, which was done through the open market route. At that time the price was Rs 1,850 per share. But, it did not have much impact on the share price for a long time.
4. Market environment: Infosys stock has fallen 20.87% in the last one year and 19.67% so far this year. Amidst challenges in the IT sector, this buyback can boost investor confidence.
5. Foreign investors selling: Foreign institutional investors (FIIs) sold IT shares worth Rs 19,901 crore in July and Rs 11,285 crore in August. Buyback can support the share price, which can benefit shareholders.
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