In line with its established practice to pay out dividends once every six months, Indian IT services leader Infosys will consider paying an interim dividend next month, to be announced along with its quarterly results on October 11, 2007.
Prompted by this information, the Infosys stock closed at Rs 1,824.30 on the Bombay Stock Exchange on Wednesday, 3 per cent above its previous close of Rs 1,771.20.
Infosys has maintained this practice during the past decade and, as a stated policy, it does not distribute more than 20 per cent of the profit after tax as dividend.
The board of directors reviews the dividend policy periodically.
The company pays out an interim dividend in October and the final dividend in April of every year. The company has fixed October 19, 2007, as the record date for the purpose of payment of interim dividend, if any.
Infosys recommended a total dividend of Rs 11.50 a share (230 per cent on the par value of Rs 5 a share) last financial year, amounting to Rs 649 crore (Rs 6.49 billion). The company distributed an interim dividend of Rs 5 a share and subsequently Rs 6.50 a share in April 2007.
The company is sitting on the largest pile of cash (Rs 6,442 crore or Rs 64.42 billion as on June 30, 2007) and has not made any major acquisition in the past four years. It has 5.61 lakh shareholders (including 663 FIIs), who hold about 57.12 crore shares.
Meanwhile, shares of software companies were the biggest gainers today after investors started buying into these counters judging that the recent fall in the prices was more than warranted.
Analysts said the announcement that the Infosys board, which is meeting on October 11 to consider the quarterly results, would also consider an interim dividend, buoyed buying in all software companies counters on expectations of better-than-expected July-September results from the IT bellwether.
Infosys Technology (up 3 per cent to Rs 1,824.30), Tata Consultancy Services (up 3.88 per cent to Rs 1,041), Satyam Computer (up 4.81 per cent to Rs 431.30) and Wipro (up 4.33 per cent to Rs 454.60) were the major gainers.
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