Infosys begins Progeon share buyback

Infosys Technologies has announced that it has kicked off a buyback plan for a certain section of employees who have shares of the erstwhile Progeon, now Infosys BPO.

The move follows Infosys buyout of Citigroup's 23 per cent stake in the BPO arm in April 2006 for Rs 518 crore. Citi had invested $20 million in 2002 to acquire 8.75 million shares.

According to information available, there are around 100 employees of Infosys BPO who had stock options which have since been vested into 11.66 lakh shares.

Infosys is buying back these share at Rs 604 a share, the same price at which Infosys bought out Citibank. This will mean that Infosys will be paying Rs 76 crore for these employees.

According to Infosys officials, the company will next work out how to compensate another 150 officials, who have options which have not been vested into shares.

"The first stage is to complete the sahre buyback by December 26 of this year and then come to the next stage later," the official noted.

Infosys BPO has close to 10,000 employees and a topline of around $102 million with operating margins at 23 per cent, the highest in the Indian BPO sector.