Infosys paying Rs 13,000 crore to shareholders is too little, says Ex-CFO Balakrishnan

A former CFO of Infosys today said the company’s decision to return Rs 13,000 crore to shareholders is “too little” and appointing a co-Chairman would make the structure much more complex at board level.

“I think it’s a good step forward but the quantum could have been bigger because they have Rs 40,000 crore on their balance sheet. Returning Rs 13,000 crore is too little,” former Chief Financial Officer V Balakrishnan told PTI in a telephonic interview. “On go-forward basis, returning 70 per cent of free cash flow is almost similar to what they (Infosys) have today — that is 50 per cent of net profit,” Balakrishnan said.

The country’s second-biggest software exporter today announced plans to return Rs 13,000 crore from its cash pile to shareholders after it reported an almost flat net profit in the March quarter and sales outlook that fell short of estimates. The Bengaluru-headquartered, NASDAQ-listed company said it would begin to pay 70 per cent of annual free cash flow as dividend compared to a previous policy of sharing up to half its post-tax profit.

Balakrishnan said, “So, probably I think the benchmark for IT services companies should be Accenture. Accenture returned substantial part of existing cash and …read more