Investors and analysts have been screaming for Infosys to buyout other companies and put the money to good use. But, the company, known to be eternally conservative, has placed the money in the ever safe government bonds and certificated of deposits.
It made a Lodestone acquisition in 2012, but, the huge cash and cash equivalents are expected to rise even further, putting pressure on the company for a larger sized buyout. In fact, the company bought the Zurich-based Lodestone Holding AG in a deal valued at 330 million Swiss francs or $350 million (over Rs. 1,900 crore). That's not a really big deal for the cash rich Infosys.
The huge cash pile has this year also allowed the company to raise its dividend. "Our cash and cash equivalents crossed $5 billion during the quarter. We have increased the dividend payout ratio to up to 40 per cent of post-tax profits effective FY 14 to enhance returns for our shareholders." said Rajiv Bansal, Chief Financial Officer.
It looks unlikely that the company will engage in a large buyout at the moment. If that happens, it would be a big surprise.