Last week’s Union Budget 2019 announced a 20% tax on buyback shares had led to IT companies like Wipro, TCS and Infosys to rethink how they payout their shareholders.
The budget also proposed increasing the minimum public shareholding to 35%, so a lot more shares are going to be up for grabs in the market as promoters dilute their own shareholding.
Both factors will have a heavy bearing on Wipro and Infosys, in particular, since investments in those companies were primary based on payout yields rather than earnings and buyback shares were a key part of their strategy.