Infy, Wipro have Most Cash as Proportion of M-Cap
Both Infosys and Wipro have been stepping up dividends but the amount of cash on their books has investors asking for much more. As of December 31, Infosys had $4.48 billion of cash and investments on its books. Wipro had $4.88 billion.
Among India-listed companies, Infosys and Wipro have the most cash as a proportion of market capitalisation and should consider returning more cash to shareholders, said Ambit Capital analyst Sagar Rastogi.
Wipro had announced a .₹ 2,500crore buyback in April last year. Analysts said any buyback by Infosys would be limited given the company’s aggressive growth plans.
“I don’t think Infosys will be able to do a mega buyback unless they reduce their growth targets. If you want to reach $20 billion in revenue by 2020 and you have said that $1.5 billion of that will come from acquisitions, you have to hold cash on the balance sheet,” a second analyst told ET. He declined to be identified.
Infosys has already been at the receiving end of calls asking it to buy back shares, having deflected such demands in 2014. At the time, former chief financial officers V Balakrishnan and TV Mohandas Pai and current Infosys board member DN Prahlad had sought a .₹ 11,000-crore buyback.
Last week, Infosys chief operating officer UB Pravin said the company was looking at all options and buybacks could happen at the appropriate time.