Infosys Buyback: On June 25, today, on June 25, the share price of Infosys reached a record high in intraday trading on the BSE and its price rose by 1.6 percent to Rs 1575 per share. This jump in Infosys shares came after the buyback of Rs 9,200 crore started on Friday. The stock also surpassed its previous record price of Rs 1568.35 per share which it touched a day earlier. The share price of Infosys has increased by 127.25 percent in just one year i.e. investors have got more than double returns.
Along with Infosys, Tata Consultancy Services (TCS), Tech Mahindra, Coforge and Mindtree also rose to 52-week highs in the Nifty IT index. Infosys has proposed to buyback at a maximum price of Rs 1750 per share i.e. 11 percent premium over the current market price. Infosys will buy back 5.25 crore equity shares after the buyback is completed. According to analysts, Infosys has reached a new high due to the fall in the rupee, strong fundamentals, new deals and the waning effect of Corona.
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Experts have mixed opinions
- Ashish Biswas, Head, Technical Research Capitalvia Global Research has advised investors to hold on to their investments as the stock price is likely to rise further. According to Biswas, Infosys will grow its digital portfolio through cloud, cybersecurity and data analytics. Digital revenue is half of the total revenue and its share will continue to grow in the total revenue share. According to Biswas, the company’s digital business will grow further and generate an average margin of more than 24 per cent of the company.
- According to AR Ramachandran, Co-Founder and Trainer, TipstoTrade, technically speaking, Infosys is overbought and investors should book profits at current levels and reinvest at the level of Rs 1450-1480. Ramachandran has kept its target price of Rs 1630 for the coming few weeks.
Decision to buyback for the third time in five years
This is the third buyback by Infosys in the last five years. In December 2017, the company had bought back 11.3 crore equity shares worth Rs 13 thousand crore at a price of Rs 1150 per share. After this, in August 2019, the company had buyback of 11.05 crore shares at a price of Rs 757.38 per share under the buyback offer of Rs 8260 crore. Talking about this calendar year, TCS and Wipro have buybacked their shares.
The company, in an exchange filing, had informed that the last date for buyback is 24 December 2021 or six months from the commencement of buyback, whichever is earlier or when the company completes the buyback process.
(The recommendations in the story are given by the respective research analysts and brokerage firms and Financial Express Online does not take any responsibility for this investment advice. Please consult the advisor before investing in capital markets.)
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