Infosys must opt for share buyback, take cue from rival Cognizant: Pai


LATEST NEWS – Former Infosys board member T V Mohandas Pai has called on Infosys to announce a share buyback that would help efficient use of capital by India’s second largest software exporter and sought to look at the issue of founders raising questions as shareholder activism similar to that in rival Cognizant.

Pai’s comments come in the wake of the larger rival Cognizant heeding to its investor hedge fund Elliott Capital, which holds 4 per cent stake in the company and had sought a board shakeup, a share buyback plan that would improve the share price of the company.

“Elliott Capital had written a letter to Cognizant asking to increase the value of shares and buyback. Cognizant board has agreed. Indian institutions should also listen to the shareholders’ demand,” he said.

Cognizant on Wednesday said it would return as much as $ 5 billion to shareholders, including share repurchase and dividends over the next two years.

“The boards have to be more accountable to shareholders. Founders of Infosys has raised this question. Why cannot the board have a buyback, it must be proper capital allocation. Infosys should look at a buyback,” said Pai. “If you see, the company’s stock price has not gone up for last five years. The market capitalisation since 2011 has not gone, it is languishing. That means something is wrong.” READ MORE


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