The IT sector's primary Infosys Ltd has sanctioned its largest-ever share buyback program for Rs. 18,000 crore, to be implemented through the tender offer method. The price of the buyback has been set at Rs. 1,800 per share, representing a premium of approximately 19% over the closing price on the previous day before the announcement (≈ approximately Rs. 1,509.50 on BSE).
In this plan, Infosys will purchase approximately 10 crore of its equity shares, which is roughly 2.41% of its paid-up equity share capital. Shareholders have to approve this by a special resolution through a postal ballot. The size of the buyback remains comfortably within regulatory ceilings, specifically not exceeding 25% of the sum of paid-up capital and free reserves.
Infosys shares have experienced a sharp plunge in the last year, off approximately 20‑22% year-to-date. The fall is occurring against a wider backdrop of stress on Indian IT stocks, due to macroeconomic tailwinds, lackluster momentum in client expenditures, and risk aversion stemming from global regulatory/tariff concerns.
Meanwhile, the company is in a strong financial position. As of the end of June 2025, it had a free cash flow of about USD 884 million (around Rs. 7,805 crore) and substantial cash and liquid investments in its balance sheet. Thus, deploying a large chunk of its money through a buyback is viewed as a way to return value to shareholders.
Experts interpret this step as assisting Infosys in improving key financial factors, such as return on equity (ROE) and earnings per share (EPS), by reducing the outstanding share count. It could also be a less tax-expensive strategy for rewarding stockholders than dividends.
Following the announcement, Infosys' stock experienced a modest positive reaction, with shares increasing by roughly 2% in early trading. Nevertheless, experts warn that it is challenging for individual investors to tender shares, noting that gains will be realized only if a substantial number of shares are tendered, as well as on the record date, and regarding procedural aspects.
Overall, the buyback is a sign of management optimism about long-term prospects despite weak short-term performance. Shareholders are provided with a healthy premium, even if there are risks of execution.
The step also brings Infosys on equal footing with its peer TCS, which had undertaken a significant buyback previously (also for Rs. 18,000 crore).