India’s second largest software company Infosys may soon announce its first-ever share buyback. The Infosys board has recommended the adoption of new Articles of Association (AoA), which may include a provision for a buyback.

Analysts expect Infosys to consider share buyback of around USD 2.5 billion (roughly Rs 12,000-13,000 crore). The company had liquid assets including cash and cash equivalents and investments worth about USD 5.25 billion (Rs 35,697 crore) on its books at the end of December 2016.

The company’s existing AoA are based on the provisions of the Companies Act, 1956, and do not provide for buybacks. The new AoA will conform to the Companies Act, 2013. The postal ballot notice uploaded on the company’s website has included the “Power to purchase its own equity shares or other securities by way of a buy-back arrangement”. The change will also enable the company to increase the number of directors to 15 and will have provisions relating to appointment of independent directors.

The decision to seek shareholder’s nod for a share buyback programme comes after two of former Infosys CFOs – T V Mohandas Pai and V Balakrishnan – recently pressed institutional investors to raise questions about the huge cash pile on the company’s books, saying investors have an obligation to protect their investment. 

Infosys’s share buyback will follow the recent buyback by the industry leader Tata Consultancy Services (worth Rs 16,000 crore at Rs 2,850 per share) and a massive buyback by Cognizant.