Former Infosys CFO V Balakrishnan, large investors wants board to consider share buy back

BANGALORE: Former Infosys chief financial officer, V Balakrishnan and a group of large investors have asked the Board of country’s second-largest software exporter to consider company’s first share buy-back as they such a measure will soothe investor confidence in the new chief executive, Vishal Sikka.

These retail investors want Infosys to go for a share buy-back as they believe that since all founders of the company have left and with a non-founder executive at the helm of the company, Infosys may make an ill-timed acquisition as it strives for industry-beating growth numbers.

"We are a set of retail shareholders who wants to impress upon the Board of Infosys to consider our proposal of announcing a large, consistent buyback program for the company," Bala wrote in a letter dated July 29. "Our discussions with large institutional shareholders of Infosys make us believe that they are supportive of this proposal"

Bala declined to comment but a person familiar with the development said since return on equity has declined consistently over the last three years, it will be a "confidence boosting" step if Infosys goes for a share buy-back.

"Look at the performance of IT stocks over the last 3 years. TCS has more than doubled. Wipro too has doubled. But Infosys share performance has lagged behind all rivals," said an executive familiar with the development. "Hence, it makes sense to go for a share buy-back, and we would propose it to be done at 52-week high"

"By writing this letter, we are providing the voice to thousands of other shareholders of the company, both institutional and retail who overwhelmingly support a large cash return to the shareholders of the company," Bala wrote in a letter sent across to all the Board members, including founder Narayana Murthy and Vishal Sikka, the first non-founder chief executive.

Ever since Infosys got listed in June 1993, the company has not done a share buy-back.