Brands
YSTV
Discover
Events
Newsletter
More

Follow Us

twitterfacebookinstagramyoutube
Yourstory

Brands

Resources

Stories

General

In-Depth

Announcement

Reports

News

Funding

Startup Sectors

Women in tech

Sportstech

Agritech

E-Commerce

Education

Lifestyle

Entertainment

Art & Culture

Travel & Leisure

Curtain Raiser

Wine and Food

Videos

ys-analytics
ADVERTISEMENT
Advertise with us

Infy to please shareholders with Rs 13,000cr bounty

Infy to please shareholders with Rs 13,000cr bounty

Thursday April 13, 2017 , 2 min Read

Finally some good news for Infosys shareholders — the IT giant has announced plans to pay shareholders through dividend or share buyback up to Rs 13,000 crore sometime in the current financial year. The company, however, did not share the details of the exercise.

If such a buyback does take place this financial year, the cash position of the company will still be very strong. The current cash position—around Rs 29,176 crore—is more than half the cash reserves held by other IT companies. Even after the Rs 13,000-crore share buyback, Infosys will have enough money to focus on platform-based innovation.

The last six months, with allegations of governance issues and shareholders clamouring for a buyback, have not been easy for Infosys. NR Narayana Murthy also prevailed over the Infosys board in appointing his confidant, Ravi Venkatesan, chairman of the Bank of Baroda, as co-chair on the board. Sources say this will help Murthy control the board, but it will also spark fresh debate on why Murthy is still getting involved in the running of the company. That said, chairman of the board R Seshsayee has welcomed the appointment of Ravi saying it will enable the board to support the management to execute strategy.

If one remembers, K Balakrishnan and Mohandas Pai, both former CFOs of the company, had mentioned that it is essential for the company to respect the shareholders’ request for a share buyback because there was "no point in hoarding so much cash." They believed that by rewarding shareholders they were reinforcing the belief that the company was committed to growth.

In the fourth quarter results announced today, Infosys' net profits dipped 2.83 percent to Rs 3,603 crore compared to the corresponding figures in the previous quarter. The consolidated revenue for the company was Rs 17,120 crore for the quarter.

Vishal Sikka, Infosys CEO, is trying to turn the tide in favour of services companies by building a narrative of doing more with less. Clearly, IT services is now focused on platforms rather than low-cost testing and application development services. The difficulty, however, is in moving away from services that have won these companies multi-million dollar deals in the past. Today, the platforms or the digital narrative make up less than 10 percent of any IT company's revenues.

Infosys’ share price has dropped 2.35 percent to Rs 946 per share.