Infosys on Thursday informed the exchanges that it has sought shareholder approval to change the company’s articles of association, which could include a provision to buyback shares worth ₹12,000 crore.
The changes in amending articles of association is in conformity with the Companies Act 2013.
Along with this, the Board of India’s second largest software exporter has also approved the recommendations of the Nominations and Remuneration Committee for revising the remuneration given to COO and whole-time Director, UB Pravin Rao. In the 2016 fiscal, Rao drew $1.39 million in salary, which included long term benefits, earnings from stock options and bonus incentives. In 2015 financial year, Rao’s remuneration was ₹6.08 crore.
Infosys did not comment on the revision of COO’s remuneration, the possibility of buyback and on the amendments that it seeks in the company’s revised Articles of Association, at the time of going to press.
Additionally, the Board also sought approval for shareholders to appoint DN Prahlad as an independent Director. Prahlad is now an additional Director and was appointed to the Board a few quarters back.
Shareholders can vote on these matters from March 2- 31 and the results will be declared on April 5. Infosys shares closed at ₹1,009 or 1.73 per cent up from previous day’s close.
By amending the Articles of Association and creating new provisions, a buyback is imminent, said TV Mohandas Pai, former CFO of Infosys.
If the Articles of Association does not have a provision then this could pave the way for a buyback, a former CFO told BusinessLine .
Large-sized Indian IT companies, sitting on billions of dollars in cash are being pressured to reward shareholders, especially at a time when growth is slowing down. Recently, Cognizant announced a $3.4-billion buyback of shares a couple of weeks back, which was followed by TCS announcing a buyback of $2.3 billion (₹16,000 crore).
Last week, industry body Nasscom said that the IT industry will grow at 8.6 per cent in the 2017 fiscal, which is the lowest it has grown since the last five years.