In a major move that signals strong confidence in its future growth, IT giant Infosys has announced its largest-ever share buyback program, valued at a massive ₹18,000 crore ($2 billion). The company's board approved the proposal on Thursday, September 11, 2025, setting a buyback price that offers a significant premium over the current market rate, a clear signal aimed at rewarding its 2.6 million shareholders.
This article breaks down the key details of the buyback and explains what it means for you as an investor.
Table of Contents
- What are the Key Details of the Infosys Buyback?
- How Will This Buyback Benefit Investors?
- How Has the Market Reacted to the News?
- Why is Infosys Doing a Buyback Now?
- Frequently Asked Questions (FAQs)
The share repurchase program is designed to return surplus cash to shareholders. Here are the essential details investors need to know:
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Total Buyback Size: A record ₹18,000 crore.
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Buyback Price: A fixed price of ₹1,800 per share.
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Premium: This price represents a handsome 19% premium over the stock's closing price on the day of the announcement.
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Number of Shares: The company will buy back approximately 10 crore shares, which accounts for 2.41% of its total paid-up equity capital.
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Method: The buyback will be conducted through a tender offer route. This means shareholders can choose to "tender" or offer their shares to the company at the fixed price of ₹1,800.
This is the fifth buyback in Infosys's history and its largest to date, surpassing the ₹9,300 crore buyback in 2022. The record date to determine which shareholders are eligible to participate will be announced later.
This corporate action has several positive implications for both short-term and long-term investors.
For Short-Term Gains:
The most immediate benefit is the opportunity to sell shares back to the company at ₹1,800, a price significantly higher than the prevailing market rate. Shareholders who participate in the tender offer can lock in a guaranteed profit on the shares accepted. SEBI regulations also mandate a 15% reservation for small shareholders (those holding shares worth up to ₹2 lakh), which can improve their chances of getting their tendered shares accepted.
For Long-Term Value Creation:
Even for investors who don't participate, the buyback offers significant long-term advantages:
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Improved Financial Ratios: By reducing the number of outstanding shares, the company's Earnings Per Share (EPS) and Return on Equity (ROE) will automatically improve, making the stock more financially attractive.
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A Strong Signal of Confidence: A buyback of this magnitude is a powerful signal from the management that they believe the company's shares are undervalued. This can boost overall market sentiment and provide strong support to the stock price.
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Tax-Efficient Returns: For shareholders, buybacks are often a more tax-efficient way to receive returns from a company compared to dividends.
The market reacted positively to the announcement, with the Infosys share price jumping over 2% in early trading on Friday, September 12, 2025. Analysts have largely given the move a thumbs up, with many viewing the risk-reward ratio for the stock as attractive at its current levels.
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Brokerage firm Jefferies has maintained a "Buy" rating on the stock with a target price of ₹1,660, citing the buyback as a positive move that reinforces the company's strong cash generation capabilities and management's confidence in its long-term growth prospects.
The buyback aligns with Infosys's stated capital allocation policy of returning approximately 85% of its free cash flow to shareholders over a five-year period. Despite a challenging macroeconomic environment for the global IT sector, this move demonstrates the management's immense confidence in its ability to generate strong cash flows and navigate the current landscape.
Q1: What is the Infosys buyback price and size?
A1: Infosys has announced a share buyback worth ₹18,000 crore at a fixed price of ₹1,800 per share.
Q2: How much premium is the buyback price over the market price?
A2: The buyback price of ₹1,800 per share represents a 19% premium over the stock's closing price on September 11, 2025, the day of the announcement.
Q3: How can I participate in the Infosys buyback?
A3: The buyback will be conducted via a tender offer. If you are an eligible shareholder on the yet-to-be-announced record date, you can offer your shares to the company at the fixed price of ₹1,800 through your brokerage account.
Q4: Is it guaranteed that all my shares will be accepted in the buyback?
A4: No, acceptance is not guaranteed. If the number of shares tendered by all shareholders is more than the 10 crore shares the company plans to buy, the acceptance will be done on a proportionate basis. However, small shareholders (holding up to ₹2 lakh worth of shares) have a 15% reservation, which increases their acceptance probability.
Q5: What does this buyback signal about the company's health?
A5: A buyback of this record size is a very strong signal of confidence from the management. It indicates that they believe the company's shares are undervalued and that they are confident in the company's future cash flow generation and long-term growth prospects.