Infosys will decide on entitlement ratio based on number of shares in retail quota available for buyback (15% of total buyback) upon total number of shares held by retail customers. And it will arrive at a percentage.
Lets assume it comes to 50%. This is the minimum percentage that Infosys would buyback.
So even if all the retail investors participate in buyback, Infosys will buy 50 out of your 100 shares.
However not all retail investors would tender their shares. So acceptance ratio is usually above the entitlement ratio.
Thank you Srinivas and Sandeep for clarification. Can I participate or tender my shares through online via online demat account ? without any physical or paper work ? I am abroad and so interested to know this please.
Hi Srinivas, you said it takes 2 days to credit the shares to the demat account and so should buy before 30-Oct-17. Is this the case explained for Online buying or physical buying ? would it take 2 days even if I buy shares through online via demat accounts like sharekhan or icicibank or zerodha ? Can I not buy tomorrow i.e on 31-Oct-17 online and will they not be available by record date 1 st nov in my demat account? Your quick reply will be appreciated please.
Yes sir, the process is completely online. You will receive a tender form to your registered email id after the record date. You can enter the number of shares you wish to tender and send a softcopy of this form to ‘[email protected]’. We’ll place the bid on your behalf. I’m assuming you are a Zerodha client.
Yes, the exchanges follow a T+2 rolling settlement cycle, so it takes 2 days for shares to come into Demat through online trading. Since your shares have to be in Demat on 1 Nov to be eligible for the buyback, 30 Oct was the last day to buy shares to be eligible for the buyback. Shares bought 31 Oct onwards will not be in Demat by 1 Nov and so will not be eligible for buyback.
when will we get the buy back tender application on registered email ? #infosysbuyback
Thanks a lot Srinivas for your valuable inputs. It is really helping out a lot of people. I had a query: i had bought infy shares on 27th oct. However, upon interacting with angel Broking representative today, I got to know that due to some technical glitches, the shares were not transferred to my demat a/c. There’re still in pool. However, he said he will transfer the shares to demat and they’ll get transferred by tomorrow morning i.e. 1st nov morning. Would i still be eligible for the buyback? The record time would be the closing on record date right?
Yes, that’s correct. If the shares reflect in your Demat as of Nov 1, then you will be eligible for the buyback. If the shares are transferred to your Demat tomorrow, then it’ll reflect in your account at the end of the day.
Thanks for the response. Cheers !!
Did anyone get mail to participate in Infosys buyback offer?
This has been discussed here.
Want to know from Zerodha as to what is the cutoff date for sending the scanned copy of the tender form to you for availing the buyback offer.
The cut-off date for participation in the buyback will be mentioned in the tender form. You have to ensure you send your tender form to Zerodha before this date so your buyback bid can be placed.
So if the entitlement ratio is 59 shares per person, then if I bid 20 shares at the max buyback price mentioned (1150 RS), then all my 20 shares will be bought for sure ??
Or I need to bid for some lower price than the maximum price to make my shares to be bought ??
The entitlement ratio is a % which is calculated as below:
Let’s assume the following data:
Closing price as of Record date: 925
Number of shares held by retail investors: 3 crore shares
Buyback price: 1150
Number of shares eligible for buyback: 1.69 crore shares
Entitlement ratio = Number of shares eligible for buyback / Number of shares held by retail investors
= 1.69/3 = 56%
So if you hold 20 shares, then your buyback entitlement is 11 shares which will be bought back by Infy at Rs.1150/share.
But if you tender all your 20 shares, then whether the additional shares will be bought back or not depends on the acceptance ratio which is based on the number of people applying for the buyback.
For a retail investor the total investment should be below 2 lacs, what if the person has shares valued above this value? Is that person not eligible for this?
If a shareholder holds above Rs.2 lacs worth of shares as of Record date, then he will be considered as an HNI investor. HNI investors are eligible for the buyback but I’m unaware of the quota set aside for the HNI category. The entitlement for buyback will depend on the HNI shareholding pattern and the quota set aside for HNI.
How will the company decide no of shares eligible. SHouldn’t all retail investors be eligible?
Will the 15% tax be deducted automatically? I am a student, and don’t fall in the taxable bracket. Will tax still be charged
Yes, all retail investors holding shares as of 1 Nov are eligible for the buyback. But the number of shares entitled for buyback is explained here.
There is no such thing as automatic deduction of capital gains tax. This is paid when you are filing for taxes.
If you held Infy for less than a year, then any gains on this investment will be considered a short term capital gain. But you can show this investment as a non-speculative business income, and the gains will then fall under your tax bracket. Since you have no other income, you don’t have to pay taxes on gains if it falls below the tax bracket.
Have query on buy back procedure,let say in Infy case the record date is 1st nov.I am holding the 100 shares of Infy in my demat account so i should get the buy back offer tender. now let say I shall sell my holding of 100 infy shares on 2nd Nov,then what will happen ?
Thanks in advance !