The announcement comes close on the heels of the completion of a Rs 16,000 crore share buyback by rival Tata Consultancy Services (TCS).
"We would like to inform you pursuant to Regulation 29 (1)(b) of the Sebi (Listing Obligations and Discourse Requirements) Regulations, 2015, that the board of directors of Infosys Limited will consider a proposal for buyback of equity shares of the company at its meeting to be held on August 19, 2017," Infosys Secretary A G S Manikanta said in a statement here yesterday.
The outcome of the board meeting will be disseminated to the stock exchanges after conclusion of the board meeting, he said.
Manikanta also said Infosys is closing the trading window with immediate effect and the trading window will reopen on August 22.
Infosys, however, did not reveal details of the proposed share buyback in the intimation sent to stock exchanges yesterday.
Infosys, in April, had said that it will pay up to Rs 13,000 crore to shareholders during the current financial year through dividend and/or share buyback.
"The board has identified an amount of up to Rs 13,000 crore (around USD 2 billion) to be paid out to shareholders during financial year 2018, in such a manner (including by way of dividend and/or share buyback), to be decided by the board, subject to applicable laws and requisite approvals, if any," Infosys said in a statement.
The Bengaluru-based firm had recently adopted a new Articles of Association that included a provision for buyback.
Infosys, which has cash reserves of about USD 6 billion on its books, has been under pressure from investors to utilise the amount either through share buyback or generous dividend.
The pressure had grown further after Infosys industry peers Cognizant and TCS announced their mega buyback offers worth USD 3.4 billion and Rs 16,000 crore, respectively, to return surplus cash to shareholders.
Country's fourth largest IT services firm HCL Technologies has also approved a buyback of up to 3.50 crore shares worth Rs 3,500 crore.
Infosys had said its current policy is to pay a dividend of up to 50 per cent of post-tax profits of a financial year.
"Effective from financial year 2018, the company expects to payout up to 70 per cent of the free cash flow of the corresponding financial year in such a manner (including by way of dividend and/or share buyback) as may be decided by the board," it had added.
Share buybacks typically improve earnings per share and return surplus cash to shareholders while also supporting share price during period of sluggish market condition.
Two of Infosys former CFOs -- T V Mohandas Pai and V Balakrishnan -- had exhorted institutional investors to raise questions about the huge cash pile on the company's books, saying investors have an obligation to protect their investment.
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