The IT major Infosys will seek shareholders' approval for its ₹9,300 crore share buyback between November 3 and December 2 this year, according to the regulatory filing by the company on Tuesday. 

On October 13 this year, the board of directors of the country’s second-largest software manufacturer approved the proposal of its own fully paid-up equity shares of the face value of ₹5 per equity shares from the members of the company for an amount aggregating up to ₹9,300 crore, for a price not exceeding ₹1,850 per equity share. As per the company, the board has constituted a buyback, comprising the chief financial officer, the deputy chief financial officer, the general counsel and the company secretary.

According to the regulatory filing, the maximum buyback size is 14.84% and 13.31% of the aggregate of the total paid-up share capital and free reserves of the company, which is less than 15% of the aggregate of the total paid-up share capital and free reserves of the Company based on the audited interim condensed standalone and consolidated financial statements as at September 30, 2022. 

“The indicative maximum number of equity shares at the maximum buyback price and the maximum buyback size bought back would be 50,270,270 equity shares, comprising approximately 1.19% of the total paid-up equity share capital of the company as of September 30, 2022 (on a standalone basis),” the company said in a statement. 

Previously, Infosys announced buybacks of ₹13,000 crore, ₹8,260 crore, ₹9,200 crore in 2017, 2019, 2021, respectively, at 20-25% premium to then prevailing market price. 

“American Depositary Shares (“ADS”) holders are permitted to convert their ADS into Equity Shares, and, subsequently, opt to sell such Equity Shares on the Indian stock exchanges during the Buyback period,” the company said. 

Moreover, the board has decided to return approximately 85% of the free cash flow cumulatively over a five-year period through a combination of semi-annual dividends and / or share buyback and/or special dividends. 

The domestic brokerage ICICI Securities said in its report that Infosys has a payout policy to return 75% of its FCF (free cash flow) over 5 years (FY20-FY24E) to shareholders. Assuming 75% payout over the cumulative FCF of ₹50,600 crore over FY23E-FY24E, the dividend plus buyback amount is expected to be ₹19,000 crore per year, the brokerage added. 

Meanwhile, in the July to September quarter this year, the IT major’s net profit witnessed a growth of 11% at ₹6,021 crore, and the consolidated revenue from operations grew 23.4% year-on-year (YoY) to ₹36,538 crore.