The top five information technology companies by market capitalisation have returned over Rs 1.17 lakh crore to their shareholders through share buyback programmes and dividends from January 2017 to January 2019 so far.
Assuming an average exchange rate of Rs 67 per U.S. dollar, this amounts to $17.5 billion. Nearly four-fifths of these payouts have come from the top two companies—Tata Consultancy Services Ltd. and Infosys Ltd. Three of these companies also rewarded investors with bonus shares in the period.
Shares of these five IT companies gained in the range on 16-68 percent during the two years.
Over 61 percent of the excess cash returned to shareholders of the top five Indian IT companies in the last two years was through buyback programmes. TCS and Infosys returned nearly Rs 32,000 crore and Rs 21,200 crore, respectively, through this route. Buybacks were the preferred route, too, for Wipro and HCL Technologies.
The amount of buybacks as a percentage of total payout stood between 54 percent and 89 percent for the top four companies. The contribution of dividends to the total was lower. Tech Mahindra was the only Nifty 50 listed IT company that did not carry out a buyback in the period.
Don’t Forget The Bonus!
If buyback programmes and dividends weren’t enough, these companies offered bonus shares, too. While TCS and Infosys rewarded one bonus share for one held by shareholders in the period, Wipro carried out two bonus issues. Wipro gave one bonus share for one share held in 2017 and the board approved another bonus issue of one share for three shares held in a meeting in January this year.
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