Infosys, India’s second-largest IT services company, has announced a massive ₹18,000-crore share buyback, offering ₹1,800 per share—a 19 percent premium over its recent market price of ₹1,512. This move directly affects over 26 lakh shareholders and signals strategic capital deployment during a period of global tech uncertainty.
Key Highlights of the Buyback
- Buyback Size: ₹18,000 crore
- Buyback Price: ₹1,800 per share
- Premium Offered: Approximately 19 percent
- Shares to be Bought Back: 10 crore equity shares
- Route: Tender offer
- Equity Impact: 2.41 percent of total paid-up capital
This is Infosys’ fifth buyback since 2017 and its first via the tender route since 2019. Unlike open market repurchases, the tender offer ensures price certainty and proportionate acceptance, making it more inclusive for retail investors.
Why Infosys Is Buying Back Shares Now
Infosys stock has been under pressure, down nearly 20 percent year-to-date due to weak global IT demand and cautious client spending. The buyback is seen as a vote of confidence from management, aiming to:
- Boost earnings per share (EPS)
- Improve return on equity (ROE)
- Provide tax-efficient returns compared to dividends
- Support the stock price in the near term
Brokerages have responded positively, with target prices ranging from ₹1,700 to ₹1,880. The move aligns with Infosys’ capital allocation policy of returning 85 percent of free cash flow to shareholders between FY25 and FY29.
Impact on Shareholders
Retail investors stand to benefit from:
- Exiting at a premium during a weak market phase
- Participating in a low-risk arbitrage
- Potential post-buyback rally and EPS accretion
Acceptance ratio will depend on the number of shares tendered. Historically, Infosys buybacks have led to short-term price stability, though long-term growth depends on how the company adapts to AI-led disruption and global tech shifts.
Strategic Takeaways for Traders and Investors
This buyback is more than a corporate action—it’s a signal. Infosys holds over ₹40,000 crore in cash reserves and is choosing to reward shareholders rather than pursue aggressive capex. For traders and investors, this opens up several strategic angles:
- Short-term arbitrage for Infosys holders
- Options trading opportunities around buyback volatility
- Sector rotation strategies as IT stabilizes
- Fundamental re-entry for long-term portfolios
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