Infosys Shares Surge Over 3% on Share Buyback Proposal
Board of Directors to meet on September 11 to consider the equity repurchase, boosting investor confidence amid sector headwinds.
Shares of Indian IT giant Infosys jumped as much as 3.68% on Tuesday after the company announced its board will meet this week to consider a share buyback. The news provided a significant boost to the stock, which has faced a challenging year amid broader headwinds in the technology sector.
In , Infosys stated that its Board of Directors will convene on September 11 to evaluate a proposal for the repurchase of fully paid-up equity shares. This potential corporate action is being closely watched by investors, especially as the company's stock has declined over 21% in the past year, reflecting weak investor sentiment and a tepid macroeconomic environment.
A share buyback is often perceived as a signal of management's confidence in the company's future prospects and can be a tax-efficient way to return capital to shareholders. The move aligns with Infosys's established policy of returning approximately 85% of its free cash flow to investors. , a significant event valued at ₹9,300 crore (approximately $1.1 billion), at a price of ₹1,850 per share.
The announcement comes after Infosys reported an 8.7% increase in consolidated net profit for its recent June quarter. However, the company also revised its full-year growth forecast downward to a range of 1-3%, highlighting the persistent uncertainty in the global IT services market. The potential buyback could provide support for the stock price and reward shareholders who have weathered the recent downturn. for details on the size, price, and timing of the proposed repurchase.