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Infosys has approved its fourth share buyback in the last five years on Thursday.

The company will buyback 5 crore shares via the open market route at a price not exceeding Rs 1,850 per share. The maximum buyback price is a premium of 30 percent to Thursday's closing price.

Overall size of the buyback will be Rs 9,300 crore. Infosys' three previous share buybacks were worth Rs 13,000 crore in 2017, Rs 8,260 crore in 2019, and Rs 9,200 crore in 2021.

Two out of the company's three previous buybacks have come through the open market route while the one in 2017 was through a tender offer.

Also Read: Infosys Q2: Full-year revenue and margin guidance narrowed while margins reverse June drop

Infosys has a capital allocation policy to return 85 percent of its free cash flow until financial year 2024 through a combination of dividends and buyback. Until financial year 2022, the company had returned nearly 73 percent of its free cash flow.

Nuvama Alternative & Quantitative research had expected that the company will buyback shares through the open market route. Based on its calculations, it expected Infosys to announce a buyback worth Rs 11,000 crore.

While the quantum is lower than their estimates, the price of Rs 1,850 per share is at the higher-end of their projection of Rs 1,750 - Rs 1,850 per share. CFO Roy said that the buyback quantum via the open market route was capped at Rs 9,400 crore and they chose to work with Rs 9,300 crore.

First Published:Oct 13, 2022 4:10 PM IST