Infosys Ltd.'s share price rose 2% on Friday after the company announced its first buyback in three years. The company will buy back shares worth Rs 18,000 crore.
Notably, the buyback is higher than market estimates. The buyback represents 10 crore shares, or 2.4% of equity. It is not the highest in terms of equity percentage. In 2017, the Bengaluru-headquartered company repurchased 4.9% equity.
Based on historical data, the entire process should take 3-4 months to complete. This will be the fifth share buyback by the IT giant in the last eight years. The buyback price has been set at Rs 1,800 per share, which is at a premium of 19.28% from the last closing on the BSE.
The buyback comes at a time of heightened pressure on IT stocks due to the worsening global macroeconomic situation led by tariff tensions between the US and India. The Trump administration has imposed a sweeping 50% tariff on India. 25% is a blanket tariff and the rest 25% is penalty for importing Russian crude.
The scrip rose as much as 2.20% to Rs 1,542.90 apiece. It pared gains to trade 1.25% higher at Rs 1,528.50 apiece, as of 09:55 a.m. This compares to a 0.21% advance in the NSE Nifty 50 Index.
It has fallen 21.63% in the last 12 months. Total traded volume so far in the day stood at 5.1 times its 30-day average. The relative strength index was at 56.
Out of 50 analysts tracking the company, 35 maintain a 'buy' rating, 13 recommend a 'hold,' and two suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 13.9%
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