Infosys share latest news | Infosys quarterly results 2021 | Infosys Share Buyback 2021 - YouTube

I, Jagdeep Singh welcome you to the video, and today's topic is Infosys where we discuss it in detail

and we will also tell you about the tender offer and open market buyback in detail and how it can impact you as a shareholder

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So let's start

Infosys is India's second-largest IT company with a presence in 46 countries in 220 locations

and have given very good returns to its shareholders in the past few years

61.6% of their revenue comes from North America, followed by Europe at 24%,

and 2.6% from India and the remaining 11.8% from the rest of the world.

When we speak of IT companies, they provide their IT solutions to different industries

like healthcare and banks require these IT solutions and hence you should see the distribution of the same

and as you can see the contribution, wherein banking and insurance make 33.1% out of their total

The second is consumer packaged goods and logistics with retail contribute 14.7%

Energy, utility resources and services about 12.5%, communications at 12.4%, Hi-Tech at 8.2%, life sciences at 7.4%

and from here you would have understood their business verticals and financial services are important as they give 1/3rd of the revenue

Infosys has 191 Fortune 500 companies as their clients

Let's now look at the whole IT industry and its future growth prospects till 2025 and how will be IT spending worldwide

Let us first talk about the Indian IT services market, which was at $74 billion in 2010 and reached $167 billion in 2018

meaning it saw 11% CAGR growth, and double-digit growth is expected from 2018 to 2025

and is expected to reach $350 billion with a 10% CAGR growth.

Whereas in worldwide spending, $793 billion in 2010 and has grown by 4.1% CAGR till 2018

and a 4.8% compounding growth is expected by 2024 and hence IT companies will benefit

Let's now see the key highlights of Infosys's quarterly results

The net profit went down by 2.3% QoQ and went up 16.6% YoY

Consolidated revenue went up by 2% QoQ and 10.7% YoY.

The IT services revenue went up by 1.5% QoQ and 13.1% YoY

The operating profit margin went down by 0.9% QoQ and went up 3.3% YoY

The company also announced an open market buyback of 9200 Cr with an upper cap at 1750 per share

but is subject to shareholder approval and then only the company will go ahead with the buyback

And they also announced Rs 15 per share dividend to those who are eligible

Let's move to the next topic of buyback, you must have heard it many a time about tender and market offer

Now, what is buyback? Assume you own a company and buy your shares from the shareholders

Meaning when a company repurchases its shares from its shareholders, it is called a buyback

And reasons can include, that the company wants to improve its control, second can be to reward the shareholders by giving them money

and sometimes company feel their share price is undervalued and hence do a buyback

Let us now understand the difference between tender offer and market buyback

In a tender offer, the company declares a particular price and time frame for the repurchase

For example, A company ABC trades at Rs 50, and the company declares a buyback at Rs 60 by tender offer

meaning they are giving the shareholders 20% premium, and they go and sell their shares, followed by the company buybacks acc to their budget

And the reason to give a premium in tender offer is that maximum people sell their shares

Open market buyback means the company will buyback their shares from the available sellers in the market

and this is done in different time frames which is announced

and Infosys has kept the price of 1750 at the open market offer and not to be confused with tender offer

It is an open market offer wherein the company will buyback below 1750 and you need to be away from this misconception

The offer amount of the buyback is 9200 Cr, the date of the public announcement was 14th April and the offer size would be at 14.85%

And the buyback price is capped at 1750. First scenario is that the CMP is lower than this, then

the company would buyback at the rate they are getting in the market,

and if it is higher, the company will put in their buy orders for 1750