Infosys share price traded higher on Wednesday, the last day of the IT major’s share buyback period. The ₹18,000 crore worth Infosys buyback opened on November 20 and closes today, November 26.
On Wednesday, share price opened higher at ₹1,534.55 apiece as against its previous close of ₹1,530 on the BSE. The stock gained as much as 0.87% to ₹1,543.30 apiece.
has been heavily oversubscribed. As per BSE data as on November 25, Infosys buyback has seen tendering of over 50.21 crore shares, which is more than 5 times the offer size.
Infosys is repurchasing 10 crore shares at ₹1,800 apiece. The buyback price is 17.6% higher than the previous closing price. Infosys share buyback record date was November 14.
entitlement ratio for the small shareholders category is 2:11, and for the general category is 17:706. This means, small shareholders will be entitled to tender 2 equity shares for every 11 equity shares held on the record date. For all other eligible shareholders in the general category, the entitlement is 17 equity shares for every 706 equity shares held. However, the acceptance ratio could be different.
The IT major’s promoters, including Narayana Murthy and Sudha Murty, and chairman Nandan Nilekani, decided not to participate in the buyback programme. The promoters collectively held 13.05% stake in the IT major on the buyback announcement date.
Should investors tender shares in Infosys buyback?
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said Infosys buyback is an attractive opportunity for retail investors to tender shares as the is at a decent premium.
However, he believes that taxation is a major drag in this case if investors are in the higher tax slabs.
“Infosys buyback would be only attractive if investors fall in a lower income slab. Long term conservative investors need not worry to hold. While short term investors can calculate the tax and participate in the tender,” Tapse said.
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