Infosys board approves up to Rs 13,000 crore buyback offer; price fixed at Rs 1,150 per share

New Delhi: The country's second largest software services firm Infosys on Saturday said its board has approved a share buyback offer of up to Rs 13,000 crore.

The buyback price of Rs 1,150 per share is nearly 25 percent higher than Friday's closing of Rs 923.10 apiece.

The company has also set up seven-member committee comprising key members like Co-chairman Ravi Venkatesan, Executive Vice-chairman Vishal Sikka, interim CEO and MD UB Pravin Rao, among others to oversee the process of the buyback offer.

The buyback offer approved by the board will comprise up to 11.3 crore equity shares or 4.92 percent paid-up equity share capital, Infosys said in a regulatory filing.

The development comes a day after Vishal Sikka quit as Infosys' CEO amid founders alleging corporate governance lapses. The board had blamed a "misguided" campaign by co- founder NR Narayana Murthy for Sikka's resignation.

The process timeline and other details will be announced in due course, Infosys said, adding that the buyback is subject to approval of the shareholders by way of a special resolution.

The company said given the significant shareholding of the US residents by way of ADS' and equity shares, it was necessary to obtain exemptive relief from the American market regulator US SEC on certain aspects of the tender offer procedures.

This is due to conflicting regulatory requirements between Indian and US laws for tender offer buybacks and the same has been obtained, Infosys explained.

The Bengaluru-based company in April had announced that it will pay up to Rs 13,000 crore to shareholders during the current financial year through dividend and/or share buyback.

Share buybacks typically improve earnings per share and return surplus cash to shareholders, while also supporting share price during period of sluggish market condition.

Infosys had cash and cash equivalents worth over USD 3.5 billion on its books as of June 30, 2017.

The buyback offer size is 20.51 percent of the total paid-up equity capital and free reserves of the company as on June 30, 2017, Infosys said.

The buyback Committee also includes CFO MD Ranganath, Jayesh Sanghrajka (Deputy CFO), Inderpreet Sawhney (General Counsel) and A G S Manikantha (Company Secretary).

A number of tech companies have announced share buyback programmes this year to offer rich returns to shareholders.

While Infosys larger rival TCS offered Rs 16,000-crore mega buyback offer to shareholders, rivals like Cognizant, Wipro, HCL Technologies and Mindtree have also made similar announcements.