Infosys Ltd's former directors and investors T V Mohandas Pai and V Balakrishnan sought a Rs 11,200 crore ($1.8 billion) buyback by India's second-largest software services company to boost the stock's value.
Infosys should pay as much as Rs 3,850 a share, Balakrishnan, who resigned from the company's board in December, and Pai, who left the board in 2011, wrote in a letter dated July 29 addressed to the board. Sarah Gideon, a spokeswoman for the software exporter, confirmed the letter was received. The
price is 9.6% premium over Tuesday's closing price.
N R Narayana Murthy, who returned as chairman in June 2013 to help revive growth, boosted margins and handed control of the software exporter he co-founded to chief executive officer Vishal Sikka on August 1. Shares of Infosys have risen 0.8% this year, compared with bigger rival Tata Consultancy Services Ltd's 16% gain.
"There is a dramatic valuation dis-connect in the market place and this needs to be corrected," Balakrishnan, Pai and D N Prahlad, a former senior vice president, wrote in the note.
The board of Infosys often gets letters from shareholders, Gideon wrote in an e-mail.
"Should there be any development that will impact our shareholders, we will immediately inform the regulatory bodies and shareholders on priority," she said.
Balakrishnan was the chief financial officer at Infosys for six years until October 2012. He was later made the chairman of unit Lodestone Holding AG, a consultancy based in Switzerland.
He is currently the chairman of Exfinity Fund, a venture capital fund based in Bangalore.
Pai was the head of human resources development before he left in June 2011. He had earlier also served as CFO. Infosys had 275.4 billion rupees in cash and short-term investments as of June 30, according to data compiled by Bloomberg.
The three former directors have also proposed Infosys should announce an ongoing buyback program of as much as 40% of the previous year's profit "on a consistent basis."
The company posted a net income of Rs 10,600 crore in the year ended March. --Bloomberg