General Trading Chat

Buyback entitlement for large shareholders is slightly less than 4.92%. So they are looking at the additional profit only for 5% of their shares. If Infy is quoting at 930, that is 220 (1150-930) for the 5%, so that works out to Rs.220*5/100 = Rs.11 per share for their holding. But post buyback, the reserves come down by 13000 Cr, and the company's share price will go down accordingly! If they find the price is going up more, then they would sell it right away! By some estimates, well, it can only be estimated, post buyback price would be around 840.

Only for the retail, 15% is reserved, and gives an entitlement ratio of 59%, that is as per shareholding pattern in the past - info from web. There are more retail participants coming in and buying, and then this entitlement ratio can go down. If it goes down to, say 25%, the profits of 220 is available only for 25%, and balance 75% will have to be sold at estimated price of 840. So the profit would be, 220*0.25 - 90*0.75, works out negative to the tune of Rs.12.5 per share, and that is a loss of Rs.2,500 for 200 shares - even at Rs.930!

All these are assumptions, as we do not know how much will be tendered for buyback, and the extent of retail shareholding on the record date. If the tendered shares is less, then the acceptance ratio increases from the entitlement ratio, and / or Infosys shares get valued higher due to better business prospects(?) the whole game could change to a bit of profit. But since it is clear that the people who do not tender their shares for buyback WILL LOSE, I would imagine everyone would be tendering for buyback.

Hope that explains the high price difference!
 

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