 "Is Infosys finally ready to make use of its massive cash pile?")
Infosys, known to be conservative when it comes to its yawning, idle cash pile, might just be willing to loosen its purse strings and reward its shareholders, an Economic Times report said today.
With cash reserves amounting to Rs 22,000 crore, it is enough to buy 16 Boeing Dreamliners, the report said.
“During an interaction with brokerage CLSA, chief financial officer Rajiv Bansal said that Infosys has set itself a deadline of 12-15 months for making an acquisition. If there is no major deal in this period, the company will seriously consider returning money to shareholders,” the report said. ( Read more here.)
[caption id=“attachment_661369” align=“alignleft” width=“380”] With cash reserves amounting to Rs 22,000 crore, it is enough to buy 16 Boeing Dreamliners, the report said. Reuters[/caption]
After the company acquired Lodestone, a Swiss enterprise software consultancyfirm for about $350 million, or Rs 1940 crore last year, there hasn’t been much talk about the company issuing dividend. Firstpost earlier reasoned why.
Analysts always believed that the company was conservative when it came to mergers and acquisitions. Firstpost earlier quoted Sudin Apte, CEO of Offshore Insights, an IT consultancy firm as saying “Historically, Infosys has been choosy about acquisitions. They are compromising on growth and sitting on liquid assets. Much to investors’ disappointment, the company has also been tightfisted about payouts. For 2011-12, the company announced a dividend of just Rs 47 per share for the full year.”
However, the ET report said analysts also see the shift in the company’s attitude towards M&A and rewarding its shareholders. That the competition among the IT titans such TCS and Cognizant has gotten only tougher is no news. What needs to be seen is how far will this take Infosys.
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