Shares of IT major Infosys rose as much as 2.8 per cent at Rs 688.70 a piece on BSE in the early trade Wednesday after the company announced its board will consider a buyback programme and payment of special dividend, among other proposals, at its meeting on January 11.
"The board of the company will consider proposals including buyback of shares, payment of special dividend, for implementation of the capital allocation policy at its meeting to be held on January 11, 2019," the company said in a BSE filing on Tuesday.
According to the capital allocation policy approved by the shareholders in April last year, Infosys plans to give back around Rs 10,400 crore to shareholders by the end of this financial year. Under the current framework, it also plans to return up to 70 per cent of its free cash flow to shareholders, said a Business Standard report. READ MORE
Last year, the software services major bought back 11.3 crore shares at Rs 1,150 apiece (unadjusted to 1:1 bonus shares), amounting to Rs 13,000 crore. The buyback scheme – a first in the company's over three-decade history – commenced on November 30 and closed on December 14, 2017.
Share buybacks typically improve earnings per share and return surplus cash to shareholders, while supporting share price during the period of a sluggish market condition.