Infosys Buyback 2019

Established in 1981, Infosys is a NYSE listed global consulting and IT services company with more than 217,700 employees. From a capital of US$250, they have grown to become a US$11.31 billion (LTM Q2 FY19 revenues) company with a market capitalization of approximately US$ 44.4 billion.

In our journey of over 35 years, they have catalyzed some of the major changes that have led to India’s emergence as the global destination for software services talent. They pioneered the Global Delivery Model and became the first IT company from India to be listed on NASDAQ. The employee stock options program created some of India’s first salaried millionaires.

Infosys is a global leader in next-generation digital services and consulting. They enable clients in 45 countries to navigate their digital transformation.

They do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. They also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight.

They always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.

 

Buy Back Offer Deal:

Buyback Type: Open Market
Buyback Offer Amount: ₹ 8260
Date of Board Meeting approving the proposal: Jan 11 2019
Date of Public Announcement: Jan 11 2019
Buyback Offer Size: 14.54%
Buyback Number of Shares: 10.32 Cr
FV: 5
Buyback Price: ₹ 800 Per Equity Share

Details of Buyback:

Approved, for the purposes of implementation of the Capital Allocation Policy, a proposal for the Company to buy back its own fully paid-up equity shares of face value of ₹ 5 each (“Equity Shares”) from the equity shareholders of the Company (other than the Promoters, the Promoter Group and persons in control of the Company), being 14.54% of its paid-up share capital and free reserves as on December 31, 2018 (on a standalone basis), for an amount,payable in cash, aggregating up to ₹ 8,260 crore for a price not exceeding ₹ 800/- per Equity Share through the Open Market Route through the Indian stock exchanges.

Salient financial parameters:

 
Year Revenue(Cr) Expense (Cr) PAT(Cr) EPS
2014 46,917.00 32,915.00 10,194.00 178.39
2015 50,637.00 34,251.00 12,164.00 105.91
2016 56,989.00 39,389.00 12,693.00 55.26
2017 62,351.00 43,413.00 13,818.00 60.16
2018 65,960.00 46,052.00 16,155.00 71.28
Note: The total no.of outstanding shares as on 31st March 2018 is 218.4 Cr. The EPS based on that is 71.28. However, the company has issued a bonus of 1:1, that means total shares outstanding would be 436.8, so EPS would be 35.64. At CMP of 653, the P/E is 18.

How to Participate in buyback?

In this method of share Buyback, the company will be purchasing stocks from existing shareholders of the company directly from the market. Example: “Infosys Technology ” announces buyback plan of its shares up to value of Rs 800, it means that the company will be purchasing shares of "Infosys Technology " from the open market at a price not exceeding Rs.800 per share. Scenario 1- If the share price is below Rs. 800 in that case, the company will put buy order at Current Market Price and purchase shares. Scenario 2- If the share price is above Rs. 800, in that case, the company will put buy order at Rs. 800 only and if someone is ready to sell at Rs.800 or less then only company will get back shares.

Profit from the buyback on the bases of acceptance Ratio:

NA

Recommendation:

Infosys Technology Limited Buyback 2019 rating by InvestorZone team => 2/10 1-5: Fair 5-7: Good 7-10: Excellent [ As it is the Open-Market Buyback, so no arbitrage for the investors. Nobody has anticipated it to be an Open Market Buyback. ]

    Present total outstanding shres are : 436.86 Crores. Buy Back is 10.32 crores of Shares. After full back these shares will be extinguished (deleted) and balance out satnding shares willbe 426.54 Crore Shares. Present EPS for 436.86 Crores shares is 35.64 Rs./Share i.e. total earnings is 15,570 Crore Rs. with revised shares (after deleting the bought shares) the new EPS will be 36.503 Rs/Share. Present P/E is 21.24. To get fair value of stock price, multiply the P/E with revised EPS of 36.503, which gives Rs. 776/. Thus the minumum tendering or expected share price of INFY during the Buy Back is expected to be 775 to 790. These are the calculations, however market can take its own direction.

    How to participate in open market buyback? do we have record date for Open market also?

      There will not be any record date for open market buy. There will be a starting date and ending date and during this period you can directly sell shares during the market hours

      This is open market offer. So they keep buying from open market and their buying price will not be more than 800. They are free to buy if the share price is less also.

    What does the open market mean? How can you sell Infosys shares in buyback?

      Open market means Infosys will buy their shares directly from the markets or exchanges through their appointed brokers or registrars similar to how we retail investors or hni or other buyers purchase by placing orders on the exchanges.
      You sell your holdings in the market directly in this case.

      Very true. Infy has always been good for investor. Even though open market buyback buyback was disappointing decision, still infy ensure no loss to retail investors. That is why Infy is darling of market.

        You can try to hold on till next quarter results as that will give a correct picture of whether they are able to achieve the guidance they have given. This quarter they had to write off their investment s in Panama and one more acquisition.
        In the mean time if you are getting a good profit on your holdings then book partially maybe half and hold on to the remaining half.
        This is my personal opinion and please it take it after your own analysis and understanding.

      Please sell it on Monday. As you have invested from point of view of buyback which was not in our favour then I would recommend to exit.

    OPEN MARKET !!!!
    OMG!!
    I can’t still beleive…
    All websites and newspaper hidden this fact…
    Simply saying, its useless…
    Great that I haven’t put my money

      I just lost with out knowledge and invested in PCJ a lot before record date and lost 1.2L.
      with the above lesson, I was cautious about Justdial and my average price is 490 and able to gain around 30K through 2 accounts.
      Important thing should be at least 30% to 40% room should be there with buy back price than only possibility is more at least for 25K to 30K.
      Otherwise it’s waste of time and loss of money.
      Many people lost money in Mphasis too. I am able to exit with 10K profit over all from Mphasis.

    INFY has given a good lesson. DO NOT rush for Buyback until announcement. Mphasis was first to retail investors. Now Infy open marker buyback is stab in back.

    Looks time to say bye bye to Buyback.

        All, who have bought in anticipation of buyback would dump, with even small profit, as price is not guaranteed in open buyback..

          Infy 707 in Pre open. In my point of view good level to exit for the investors who participated due to buyback as per my suggestion at around 640-660.

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    May be this is the reason Infy ADR up.

      Hope this ADR performance continues in Indian market on Monday too, at least it will be big relief for retail investors.

    What does this buyback from open market means ? … why is it not beneficial from small investor point if view

      Through open market, it means the company will not buy directly from a person through the tender route.
      Under open mkt route it buys directly from the stock exchange its shares.
      Hence, unlike mkt expectations of tender offer route like last time, this has not come through, and hence a gap down opening on monday

        Does that mean that the rate of Infosys can be at any rate below 800 rs at the time when the company will buy from the exchange

        You have stated Under open mkt route it buys directly from the stock exchange its shares. Then how will it practically work . Can you just explain how we can sale in the open market through buyback. Suppose I have put 100 shares for buyback then how many they will purchase? Or it can be NIL buyback also. Will I have to put for sale everyday till the period is open

    Results Update:

    Quarter—————- Q3FY19——————– Q2FY19
    PAT———————–3610 Cr( -12.21% QoQ)———————4110 Cr
    Revenue—————–21,400 Cr( 3.8% QoQ) ——————-20069 Cr

      Disappointing result but probably they have factored in losses of panaya sale. let us get more info
      In any case, not positive

      Not expecting a gap down. The guidance has improved and this write down of skava and panaya was anyways anticipated. Margins would have been flat except for the write down.

    The company also declared a special dividend of Rs 4 per equity share and fixed January 25, 2019 as record date for the special dividend and January 28, 2019 as the payment date.

    Big Disappointment from Infosys. The buyback offer is from Open market.

    I suggested Infosys buy when it was announced first time by management. At that time it was around 640 range. I again suggested buying around 660. Today it hit 680 and it won’t surprise me if it flies pass 700 on 11.01.2019.

    Wizard Sir and other senior members with due respect to you, I feel we should write or ask/ post queries pertains to particular company which is there in the list and in that column ( if not in the list it’s ok) we should avoid posting queries of L&T & HEG in Infosys etc. Hope you all agree with me.

      Yes completely agree with you. The query of particular buyback should be asked in particular page. It will not only help everyone to be in unison but also to clear common doubts.

      Yes, I too agree for this. Going forward, its better to post any query at its respective company page only. Thanks.

      One discussion forum “ALL” shall be defined so that Users can go through all new post related to any Company.

      Each post shall be categorized in Company wise so that if any one want to see posts related to a specific company, he/she can select and view.

      This is a feedback

    As per exchange website:
    Buyback is not part of agenda of meeting. Because of market roumors, company has issued clarification regarding Buyback.
    Buyback is sure?
    What is probability of Buyback?
    If Buyback will be 10k Cr, can we assume that there will be no final Dividend?

    Mkt buzz – Infosys is seen announcing a $1.6-bln buyback and buy back shares at 800 rupees each, in line with its plan of returning $2 bln to investors announced at the start of the year.

      This depends upon buyback price. However, at this point you can buy 200 shares.

      Yes, you can buy shares now and can participate in the buyback.

    I received some messages on phone (probably from marketing companies) that 3M India is planning a Share Buyback soon.

    Is it true?

      Please ignore all these messages. If some internal person knows 3M buyback is coming then why on earth he would message you and tell about this. Until Management confirms to the Exchanges please ignore all this.

      Market wizard ji , please tell me about upcoming Wipro buyback and also about privious Wipro buyback details .

      should be between 800-900. But this all is guess work.

    Clarification from the Infosys Management for the news published in the Times of India and other leading newspapers/media articles appeared on December 24, 2018, titled- “Infosys likely to buy back shares again, for $1.6bn”

    The Board decided to retain the policy of returning up to 70% of the free cash flow of the corresponding Financial Year in such manner, as may be decided by the Board from time to time, subject to applicable laws and requisite approvals.

    the Board identified an amount of up to ₹ 13,000 crores to be paid to shareholders in the following manner:

    a. A special dividend of ₹10 per share resulting in a payout of approximately ₹ 2,600 crores in June 2018; and

    b. Identified an amount of up to approximately ₹ 10,400 crores to be paid out to shareholders for the Financial Year 2019, in such a manner, to be decided by the Board, subject to applicable laws and requisite approvals, if any.

    So as per point ‘b’, the Market Pandits are expecting that Infosys will do a buyback of close to 10000 Cr in FY19.

      As per exchange website:
      Buyback is not part of agenda of meeting. Because of market roumors, company has issued clarification regarding Buyback.
      Buyback is sure?
      What is probability of Buyback?
      If Buyback will be 10k Cr, can we assume that there will be no final Dividend?

    Infosys
    Dividend will be 10₹ per share

    Buyback Size expected to be 10,000 Cr+

    Meeting on 11th January 2019

    *Fwded msg*

    any news about selan exploration technology ltd. news 22-12-18 for buyback meeting on 27-12-18

    Market wizard ji , Please provide me , Infosys buyback details of 2017, like acceptance ratio, profit etc.

      Last Year the Buyback was announced on 16.08.2017. The Buyback was approved by shareholders on 09.10.2017.

      1. Price of Share on 16.08.2017– 976( Pre Bonus).

      2. Buyback Price = 1150

      3. Record Date= 01.11.2017

      4. Share Price on Record Date= 926

      5. Letter of Offer announced on 20.11.2017( Entitlement Ratio= 28%)

      5. Buyback Open = 30.11.2017

      6. Buyback Close = 14.12.2017

      7. Share Price on 14.12.2017= 1012

      8. Final Acceptance Ratio= 55%

      9. The remaining shares were returned back on 22.12.2017. The share price on 22.12.2017 was 1040.

      Profit Calculation:

      Now had you bought Infosys share on the date of buyback announcement i.e 16.08.2017 and invested Rs. 200000( Retail Category), you would have got 204 Shares and considering you sold unaccepted shares on 14.12.2017 ( Settlement Date). So,in the Buyback, 112 ( 204*55%) shares are taken back by Infosys and 92 shares are returned back.

      Total Profit = 112*( 1150-976) + 92*(1040-976)= 25336 .

    Market Pandits are expecting a Buyback price not above 900.

        Last time they did a buyback of close to 11.30 cr shares and total buyback size was 12994 CR.

        In this buyback also the company is willing to give back close to 11000 Cr to shareholders. So 11000/900 is close to 12 Cr.So the market is expecting that Infosys will buy close to 12 Cr shares again as they did last time.