In a letter to Infosys Board, the three former executives said there is a need “to announce a large and consistent buyback programme to show confidence in the management and the business model”.
While both Pai and Balakrishnan have served as Chief Financial Officers at Infosys in the past, Prahlad was a Senior Vice President at the Bangalore-based firm. It could not be immediately ascertained whether the three former executives continue to hold stakes in Infosys.
“Infosys should immediately buy back its shares to the tune of Rs 11,200 crore (which is roughly 40 per cent of the existing cash and cash equivalents),” the letter said.
When contacted Balakrishnan confirmed writing the letter,but refused to disclose the contents. Pai declined to comment while Prahlad could not be contacted.
The trio want the buyback at the 52-week high price of Rs 3,850 per share. They also want Infosys announcing an ongoing buyback programme to the extent of 40 per cent of the previous year’s net profits on a consistent basis.
Infosys shares today gained 1.20 per cent to close the day at Rs 3,504.25 compared to its previous closing.
When contacted, an Infosys spokesperson said: “The Infosys board and management receive requests on a variety of subjects from shareholders and investors on an on-going basis.
“These are addressed by the board and the management in due course. In this particular case, we have received this request only from three retail investors.”
Should there be any development that will impact Infosys’ shareholders, the company will immediately inform regulatory bodies and shareholders on priority, the spokesperson added.
The letter said Infosys believed in increasing shareholders’ wealth but in the past three years its stock has heavily underperformed and it has “resulted in a wealth destruction”.
“Now, with the management exuding confidence and the Infosys’ share price still depressed, there is a need for the Board to announce a large and consistent buyback programme to show confidence in the management and the business model, going forward,” it added.
After a series of top level exits, Infosys top management has undergone a change recently, with Vishal Sikka assuming charge of its CEO and MD replacing S D Shibulal who retired. Sikka is the first non-founder to head the company.