Infosys to consider buyback, turnaround for Tata Motors, and u-turn on Remdesivir: Three things Teji Mandi investors should know on April 12, 2021
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Infosys to Consider Buyback

Infosys is likely to consider the buyback of its shares in its upcoming board meeting scheduled on April 14, 2021. If approved, this will be the third share buyback by the company.

Its previous two buybacks were announced in October 2017 and January 2019 for the amount of Rs 13,000 crore and Rs 8,200 crore respectively. On previous occasions, Infy had opted for buybacks at 25% premium in FY18 and 17% premium in FY19.

During a buyback, a company repurchases free-float shares of the company from its existing shareholders. It helps the company to re-absorb the ownership by acquiring shares from its existing shareholders at a fixed value per share.

The company usually announces buyback at a price higher than what is quoted in the market. It is an effective method to distribute free cash flow and unlock value for the shareholders. The buyback also signifies that the promoters are optimistic about the company's prospects. Hence, they are buying shares from the market at a premium price.

Tata Motors' Significant Jump

Based on the registration data provided by FADA, Tata Motors made a significant jump during the previous financial year capturing the market share while M&M lost the most among the listed players.

The report suggested that Tata Motors was the third-biggest Indian car brand in FY21. It closed the financial year with a share of 7.93% as against 5.62% posted in FY20. Maruti Suzuki also closed FY21 with a marginal gain. India’s largest car maker's retail share increased to 48.86% compared to 47.83% in FY20.

Mahindra & Mahindra struggled to maintain its position as it continued to lose the market share. The company saw its retail share come down to 5.39% from 7.37% during FY21.

Among the other notable non-listed players, Hyundai lost its market share marginally to 17.47% in FY21 as against 17.12% in FY20. Kia Motors made significant inroads with its market share jumping to 5.38% in FY21 from 2.86% in FY20.

U-Turn on Remdesivir

The government has banned the export of antiviral drug Remdesivir to tackle the rising cases of COVID-19 in the country. Export of the active pharmaceutical ingredients (API) is also banned in order to increase the supply of raw materials to Remdesivir manufacturers.

As the number of active cases has surged to 11 lakhs, a severe shortage of Remdesivir is reported from across the country. The government has also advised the manufacturers to display the details of their stockists on their websites to facilitate access to the drug.

Though the decision to ban the export of Remdesivir and its key ingredients has come a little late, it is still better late than never. This will increase the availability of Remdesivir for the Indian citizens. Currently, the total production of Remdesivir is close to 38 lakh units per month in India. The ban on exporting APIs will also help in increasing production.

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