Infy, Wipro have Most Cash as Pro­por­tion of M-Cap

The Economic Times - - Econ­omy: Macro, Mi­cro & More -

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.

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