Infosys Announces Share Entitlement Ratio For Rs 18,000-Crore Buyback

Infosys Ltd. has released the share entitlement ratio details for its upcoming Rs 18,000-crore share buyback, which is scheduled to open on November 20 and close on November 26. The company has outlined separate entitlement ratios for retail shareholders and for general category investors, in line with the regulations governing buyback processes in India.

Buyback Entitlement Ratio Announced

According to the disclosure, the entitlement ratio for retail or small shareholders has been fixed at 2:11, meaning that these investors will be entitled to two equity shares for every 11 equity shares held as on the record date.

For the general category, which includes both institutional and non-institutional investors, the entitlement ratio has also been defined, though the article highlights the retail entitlement more prominently due to the regulatory requirement of reserving a portion of the buyback for this category.

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Who Qualifies As A Retail Shareholder?

A small or retail shareholder is defined as an investor holding equity shares worth Rs 2 lakh or more based on the value as on the record date. This classification becomes significant because the buyback rules require companies to allocate a specific portion of the buyback size to this segment of investors.

As per regulations, there is a mandatory requirement to reserve a portion of the total buyback size for retail shareholders. For this buyback, Infosys has allocated 15% of the total size, which amounts to Rs 2,700 crore. This allocation directly influences the entitlement ratio, resulting in a higher entitlement for retail shareholders compared to the general category.

Comparison With Previous Buyback

Infosys has previously conducted large buybacks, and the article briefly compares this year’s programme with the one executed earlier. In 2017, the company had bought back 4.9% of its equity, a significantly higher percentage than the 2.4% equity it will buy back under the current programme. The company’s decision to proceed with the Rs 18,000-crore allocation marks one of its biggest repurchase plans by overall size.

The buyback mechanism remains consistent with standard processes, including defining categories of shareholders, setting record dates, and disclosing entitlement ratios to all eligible investors.

Regulatory Requirement Drives Retail Allocation

The mandatory regulatory requirement to earmark 15% of the buyback for retail shareholders is a central aspect of the buyback design. This ensures that small shareholders receive a fair opportunity to participate in the repurchase programme.

Because of this rule, the entitlement ratio for retail shareholders is higher than that of the general category. With Rs 2,700 crore allocated to retail shareholders, the entitlement ratio reflects both the regulatory quota and the proportion of retail shareholders relative to the total shareholding.

Key Dates And Participation Structure

The buyback opens on November 20 and will remain open until November 26, offering a six-day window for eligible shareholders to tender their shares.

The entitlement ratio outlines the minimum number of shares that shareholders are eligible to have accepted in the buyback offer. However, actual acceptance could vary depending on how many shares are tendered by eligible participants during the buyback window.

Snapshot of Buyback Details

• Total Buyback Size: Rs 18,000 crore

• Buyback Window: November 20–26

• Retail Shareholder Entitlement Ratio: 2:11

• Retail Shareholder Allocation: 15% or Rs 2,700 crore

• General Category: Institutional and non-institutional shareholders

• Retail Shareholder Definition: Nominal share capital of Rs 2 lakh or more

• 2017 Buyback Comparison: 4.9% equity bought back vs. 2.4% this year

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