Infosys hits 3-year low as buyback fails to cheer Street

STOCK MARKET - Infosys dipped  to its three-year low of Rs 881, down 4.5% in intra-day trade, extending its previous day’s fall of nearly 10% on National Stock Exchange (NSE) after the IT major's buyback plan failed to cheer the markets. The company on Saturday announced that it would buy back shares worth up to Rs 13,000 crore, or 4.92%, from investors at Rs 1,150 per share.

The share buyback price is at a whopping 24.6% premium to its Friday’s closing price of Rs 923. But this is post 10% correction the stock underwent on Friday, after the resignation of Managing Director and Chief Executive Officer (CEO) Vishal Sikka.

“Vishal Sikka's exit was the biggest risk and with this becoming an eventuality, the company faces a big challenge of filling the leadership vaccum. Sikka had guided the company well at a time when the industry is undergoing a metamorphosis towards newer technologies,” according to analysts at Antique Stock Broking.

We believe that leadership churn and the resultant growth slowdown will result in stock trading at the lower end of its historical range, said the brokerage firm in company update.

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