Infosys Approves ₹18,000 Crore Share Buyback at ₹1,800/Share

Infosys Ltd., one of India’s largest IT services companies, has approved its biggest-ever share buyback worth ₹18,000 crore. The tender offer comes with a buyback price of ₹1,800 per share and will involve repurchasing about 2.41% of its fully paid-up equity, signalling strong confidence from management in the firm’s financial health and commitment to returning value to shareholders.

What the Buyback Proposal Entails

Size and Scope

• The buyback program totals ₹18,000 crore (approximately US$2.04 billion) and is the largest in Infosys history.
• About 10 crore (100 million) fully paid-up equity shares will be bought back.
• These shares constitute 2.41% of Infosys’s existing paid-up equity capital.

Price and Route

• Each share will be repurchased at ₹1,800 per equity share.
• The buyback will be executed through the tender offer route.

Funding and Financial Position

• Infosys has free cash flow (FY25) of over ₹20,000 crore and had cash and cash equivalents of more than ₹42,000 crore, making this buyback well within its capacity.
• The company follows a capital allocation policy of returning about 85% of its cumulative free cash flow over five years through dividends, share buybacks, or special dividends.

Context: Historical and Market Perspective

Past Buybacks by Infosys

• Infosys previously carried out buybacks in 2017, 2019, 2021, and 2022, with amounts ranging from ~₹8,000–13,000 crore.
• In October 2022, for example, the company undertook an open market buyback of about ₹9,300 crore at a maximum price of ₹1,850 per share.

Market Reaction & Share Price Impact

• Ahead of the board meeting on September 11, 2025, Infosys shares fell ~1–1.5%, with the market likely anticipating the buyback announcement.
• The buyback price of ₹1,800 per share represents a premium (~19%) over the share’s market price at the time of announcement.

Strategic Implications

• By reducing the number of outstanding shares, the buyback is expected to bolster earnings per share (EPS) for remaining shareholders.
• It also signals management’s confidence in steady future cash flows, especially during periods of global economic uncertainty affecting IT demand.

Regulatory, Record Date & Execution Details

• The record date, which determines which shareholders are eligible to participate, will be announced in due course.
• The tender offer route means shareholders will need to submit offers to sell their shares at the declared buyback price during a specified timeline, as per regulatory filings.

Potential Risks & Considerations

• While buybacks generally improve metrics like EPS, they also reduce cash reserves; Infosys appears to have sufficient buffer, but any future cash demands (e.g. acquisition, investment) need to be factored in.
• Shareholders who do not tender their shares will see dilution of ownership in terms of percentage of equity not held in the buyback, though their relative stake value may benefit if valuation improves.
• The premium paid means that if future share price growth is muted, there is a risk that some tendering shareholders could have sold in market at higher prices, though this depends on market movement.

What it Means for Shareholders and the Market

• Shareholders tendering will get ₹1,800 per share, assured, for shares they offer.
• Remaining shareholders may see improved earnings per share and possibly enhanced share price due to decreased float, assuming positive investor sentiment.
• For the broader IT sector and Indian markets, Infosys’s move could set a precedent for capital deployment and boosting investor confidence.

Infosys’s ₹18,000 crore share buyback at ₹1,800 per share, for 2.41% of its equity, marks its largest repurchase program to date. Backed by healthy cash flows and a clear capital return policy, the decision underscores the company’s confidence in its financial strength. For shareholders, the buyback offers a direct payout opportunity, while the reduced equity base could enhance per-share value for those who choose not to tender.

Tags: Infosys buyback, ₹18,000 crore buyback, share repurchase India, Infosys announcement 2025, EPS impact, IT stocks India