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The stock of IT consulting & software Company is trading at its highest level since August 21, 2017, up 14% from its 52-week low of Rs 862, touched on August 22, in intra-day trade. Thus far in the month of November, Infosys outperformed the market by gaining 6.5% against 0.54% decline in the S&P BSE Sensex.
The counter has seen huge trading volumes with a combined 3.69 million shares exchanging hands on the NSE and BSE till 12:53 PM. An average combined 3.3 million shares were traded in the past two weeks on both the exchanges.
On October 31, 2017, the stock had turned ex-date for the proposed buyback and for interim dividend of Rs 13 per share. The company’s board had fixed November 1, 2017 as the record date for determining the entitlement and the names of the equity shareholders, to whom the Letter of Offer will be sent and will be eligible to participate in the buyback which was approved in the board meeting on August 19, 2017.
The Buyback offer comprises a purchase of up to 113 million equity shares aggregating up to 4.92% of the paid-up equity share capital of the Company at a price of Rs 1,150 per equity share. The buyback is proposed to be made from all eligible equity shareholders on a proportionate basis through the "Tender offer" route.
Analysts at IIFL Institutional Equities in Q2FY18 results review said that despite the recent turmoil, Infosys outperformed its large peers for the second quarter now. Further, closure of the Panaya investigation and no material change to strategy means CEO selection is the only major pending issue and would be the key catalyst along with earnings delivery in the near term.
“We maintain ADD with 12-month target price of Rs 1,050, underpinned by balanced risk-reward as risk of slippages and uncertainty around the new CEO is adequately priced in, reflected in the steep valuation discount vs. peers. US $2 billion buyback and 3.2% dividend yield provide valuation support”, the brokerage firm said in a report.