Infosys Announces Share Entitlement Ratio For Rs 18,000-Crore Buyback — Check Key Details

Infosys Ltd. on Tuesday announced the share entitlement ratio details of its Rs 18,000-crore buyback, which is set to open on Nov. 20 and close on Nov. 26.

The buyback ratio for retail investors or small shareholders is set as 2:11, or two equity shares for every 11 equity shares held. For general category investors, which includes institutional and non-institutional investors, the ratio has been set as 17:706, or 17 equity shares for every 706 equity shares held as on the record date, as per the exchange filing.

Infosys recorded its shareholders' roster for the buyback on Nov. 14.

If a shareholder is applying for the buyback, the entitlement factor or cutoff under reserved or small shareholder category is 18.1% and for general category it is 2.4%.

A small or retail shareholder is one with a nominal share capital of Rs 2 lakh or more as on the record date.

As per regulations, companies have to reserve a portion of the total buyback size for the small shareholder or retail shareholder category. Infosys has set this at 15% or Rs 2,700 crore. This consequently leads to a higher entitlement ratio for the category in question.

In 2017, Infosys had bought back 4.9% of equity, which is almost double of the 2.4% it will buyback this time. However, Rs 18,000 crore is the highest ever buyback size announced by the tech giant, and almost double the earlier two buy back sizes.

From Oct. 1, 2024, onwards, buyback tax burden shifted from the company to the individual shareholder as entire proceeds received by the beneficiary is treated as a deemed dividend.

This dividend is taxed at the individual's applicable income tax slab rates and under the new regime, this could vary between 5%-30%.

The shares of Infosys ended 1.41% lower at Rs 1,486.4 apiece on the NSE, ahead of the announcement, compared to a 0.4% decline in the benchmark Nifty. The stock has fallen 21% year-to-date.