Infosys Shares Jump on Buyback Demand

Infosys rose nearly 3 per cent to a high of Rs 3,608 on Wednesday after three former employees urged the IT major to buy back shares worth Rs. 11,200 crore. The stock ended as the top Nifty gainer and provided support to the bluechip indices on a day when markets came under selling pressure.

(Also read: Why Infosys ex-CFOs Want Rs 11,200 Crore Buyback)

Former Infosys CFOs T V Mohandas Pai and V Balakrishnan along with another former official D N Prahlad said the buyback will help check the "asymmetry of information" between management and investors. (Read the full story here)

"Infosys should immediately buy back its shares to the tune of Rs. 11,200 crore (which is roughly 40 per cent of the existing cash and cash equivalents)," the letter said.

The trio wants a buyback at the 52-week high price of Rs. 3,850 a share. They also want Infosys to announce an ongoing buyback programme to the extent of 40 per cent of the previous year's net profits on a consistent basis.

The letter said Infosys believed in increasing shareholders' wealth but in the past three years, its stock has heavily underperformed and has "resulted in wealth destruction".

Meanwhile, Infosys said, "The management receives requests on a variety of subjects from shareholders and investors on an ongoing basis. These are addressed by the board and the management in due course. In this particular case, we have received this request only from three retail investors."

Infosys shares closed 1.8 per cent higher at Rs 3,575.85, outperforming the broader Nifty, which fell nearly 1 per cent. Over the last week, Infosys shares have gained 6 per cent outperforming a 1 per cent gain in the IT sub-index on the BSE.

(With inputs from PTI)