Infosys hits new high, trades above share buyback price of Rs 1,750

The stock has outperformed the market by gaining 13 per cent in the past one month

Shares of Infosys hit a new record high of Rs 1,755, up nearly 1 per cent on the BSE in intra-day trade on Wednesday. At 10:18 am, the stock was trading at Rs 1,751.75, above its maximum share buyback price of Rs 1,750 per share.

The IT major had commenced share buyback programme worth Rs 9,200 crore on June 25, 2021, wherein it had proposed to buy back shares at a maximum price of Rs 1,750 apiece.

The buyback will be closing on the expiry of six months from the commencement date; or when the company completes the buyback by deploying the amount equivalent to the maximum buyback size; or at such an earlier date as may be determined by the Board.

The company will utilise at least 50 per cent of the amount earmarked as the maximum buyback size for the buyback i.e. Rs 4,600 crore. Based on the minimum buyback size and the maximum buyback price, the company will purchase an indicative minimum of 26.29 million equity shares.

Infosys said the buyback is being undertaken by the company after taking into account the strategic and operational cash needs in the medium term and for returning surplus funds to the members in an effective and efficient manner.

In the past one month, the stock has outperformed the market by gaining 13 per cent after Infosys raised its revenue growth guidance for the financial year 2021-22 (FY22) buoyed by a robust deal pipeline. In comparison, the S&P BSE Sensex was up 5.5 per cent during the same period.

While announcing its April-June quarter (Q1FY22) results on July 15, 2021, Infosys said it expects its revenue to grow by 14-16 per cent in FY22, up from the earlier estimate of 12-14 per cent. The company, however, maintained margin guidance at 22-24 per cent in FY22. In Q1FY22, large deal intake was healthy at $2.6 billion (30 per cent new), with 22 large deals signed during the quarter. The deal pipeline remains healthy with a good mix of new and renewal deals, offering good revenue visibility.