Infosys tweaks capital allocation policy to give back 85% of free cash flow

Infosys on Friday altered its capital allocation policy to give back 85 per cent of its free cash flow to shareholders effective from FY20. Earlier, the company was distributing up to 70 per cent of its free cash flow to the shareholders.

“Effective from FY20, the company expects to return around 85 per cent of the free cash flow cumulatively over a period of five years through a combination of semi-annual dividends or buybacks," the firm said in a statement. It is conducting a share repurchase programme of Rs 8,260 crore, under which it has bought back shares worth Rs 5,934 crore.

On the proposed taxation on share buybacks, Infosys CFO Nilanjan Roy said the firm would continue its existing buyback as planned by the board.

“We have already finished Rs 6,000 crore of buyback till the end of June and have about Rs 2,000 crore left. The board has approved the continuation of buyback," he added.

The company also said its capital allocation policy has been framed after taking into account its future investments needs including acquisitions. "We have a cash reserve of around $3.5 billion which we feel is enough to meet our future acquisition requirements."

Infosys Technologies Limited