Infosys Approves Record ₹18,000 Crore Share Buyback Amidst Market Challenges

Infosys Approves Record ₹18,000 Crore Share Buyback Amid Market Challenges

Bengaluru, September 11, 2025 — In a bold move to bolster shareholder confidence, Infosys Ltd has announced a historic ₹18,000 crore share buyback, marking the largest repurchase of securities in the IT giant’s history. The board approved the buyback on Thursday, setting the price at ₹1,800 per equity share, a significant 19% premium over the closing price of ₹1,509.5 on the same day.

The buyback, which will be executed through the tender offer route, aims to repurchase up to 10 crore shares with a face value of ₹5 each. This initiative comes as Infosys grapples with a nearly 20% decline in its share price since the beginning of the year, attributed to geopolitical uncertainties and trade tensions.

Understanding the Buyback

A share buyback, or repurchase, allows a company to buy its own shares from existing shareholders, effectively reducing the number of outstanding shares in the market. This can enhance the company’s valuation and earnings per share (EPS), serving as an alternative method of returning cash to shareholders.

Currently, companies can conduct buybacks either through a tender offer or by purchasing shares directly from the open market. The maximum limit for any buyback is capped at 25% of the aggregate paid-up capital and free reserves.

Historical Context

This buyback marks the fifth and largest repurchase by Infosys, following previous buybacks of ₹13,000 crore in 2017, ₹8,260 crore in 2019, ₹9,200 crore in 2021, and ₹9,300 crore in 2022. The company’s decision reflects a strategic move to leverage its cash reserves, which stand at approximately ₹24,455 crore.

Sumit Pokharna, Vice President and analyst at Kotak Securities, noted, “The stock has fallen significantly, but there is substantial value in the company. The buyback is a clear signal of confidence in Infosys’s long-term prospects.”

Shareholder Benefits and Tax Implications

For shareholders, participating in the buyback could be financially advantageous, particularly for those in lower tax brackets. However, the current tax policy treats proceeds from share sales as dividends, which are taxable. Shareholders may also incur capital losses based on their purchase price and holding period.

As of June 30, 2025, approximately 24.86 lakh resident individuals held nominal share capital of up to ₹2 lakh in Infosys, indicating a broad base of potential participants in the buyback.

Industry Trends

Infosys’s buyback announcement aligns with a growing trend among Indian IT companies, including Wipro, HCL Tech, and TCS, which have increasingly turned to buybacks as a means to return cash to investors. According to a report by Nomura Research, the buyback is expected to be largely EPS-neutral by FY26, with Infosys planning to progressively increase dividends in the coming years.

As Infosys embarks on this significant financial maneuver, the market will be watching closely to see how it impacts shareholder sentiment and the company’s stock performance in the months ahead.