Infosys Infighting & Share Buyback

Andrew Cummings
August 22, 2017

The Sensex resumed higher at 31,609.93 and hovered between 31,641.81 and 31,458.26, It was quoting at 31,495.20 at 1050 hours, down 29.48 points, or 0.09 per cent, at 1050 hrs. Meanwhile, the broad based NSE Nifty went down by 83.05 or 0.84% at 9,754.35 with 43 components posting drop. Both the indices have closed at their lowest level since August 11. The Infosys stock which had lost 15 per cent in the last two trading sessions too was making moderate gains.

The German DAX shed 0.3 percent, France's CAC 40 index declined 0.6 percent and the U.K.'s FTSE 100 lost 0.9 percent.

Following Sikka's resignation, Infosys' ADS dropped as much as $1.43 per share, or almost 9 per cent, during intra-day trading on August 18, the day Sikka suddenly quit as CEO.

The board of Bengaluru-headquartered Infosys approved the repurchase of 113 million shares at 1,150 rupees apiece ($F36), the company said in a stock exchange filing, returning cash to investors at a substantial premium to Friday's closing price of 923.25 rupees ($F29).

"The weakness came on the back of weak global cues on rising doubts about US President Donald Trump's ability to deliver his economic agenda and suspected terror attack in Barcelona, Spain".

The rupee opened at Rs 64.07 to the dollar, eight paise up from Friday's close. The currency markets were closed on Thursday on account of Parsi New Year.

Foreign institutional investors (FIIs) continued with their selling spree, turning net sellers of Indian equities worth Rs 1,983 crore while DIIs ended up as net buyers to the tune of Rs 474 crore, according to provisional data released by the National Stock Exchange. "Top gainers on the NSE were Infratel, Eicher Motors and Hindustan Unilever, while top losers were Infosys, Sun Pharma and Zee", Desai added.

Besides, heavy selling pressure witnessed in oil and gas, automobile, IT, banking and capital goods stocks too weighed heavy on key indices. The buyback price of Rs 1,150 per share is almost 25 per cent higher than Friday's closing of Rs 923.10 apiece.

Mumbai: Domestic as well as overseas mutual funds had raised their stakes in Infosys Ltd from a year before at the end of July, indicating that the company, which was once termed at the IT bellwether, was still the preferred bet in the otherwise out-of-favour software services sector, at least until the previous month.

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