Infosys has announced its largest-ever share buyback, worth Rs 18,000 crore, at Rs 1,800 per share, a 19% premium to Thursday’s closing price. The move comes as the software giant’s shares remain in bear market territory, down 23% from their peak, though they’ve rallied 8% over the past four trading sessions in anticipation of this announcement

What does Infosys buyback mean?

The buyback will cover 2.41% of Infosys’ outstanding equity, directly benefiting the company’s 26 lakh shareholders. For those who participate, it’s an immediate arbitrage opportunity, selling shares back to the company at Rs 1,800 when the market price is around Rs 1,511.
“This buyback could support the stock price in the near term by boosting EPS by 3-5%,” said Akshay Badjate, Fund Manager at Merisis PMS, pointing to the company’s robust financial position with “over Rs 40,000 crore in cash and liquid investments.”

Why is Infosys doing a buyback now?

The timing appears strategic. Foreign institutional investors have been selling Indian IT stocks, with an outflow of Rs 19,901 crore in July, followed by Rs 11,285 crore in August. Analysts see the buyback as management’s vote of confidence

“Given current timing amid heightened macro uncertainty around tariffs etc, see this as a vote of confidence on stability in F26 guidance in upcoming results,” noted Morgan Stanley, which maintains an Equal Weight rating with a target price of Rs 1,700.

This marks Infosys’ fifth buyback – the last was in 2022, worth Rs 9,300 crore through open market purchases. However, this latest buyback will be conducted through the tender offer route, unlike the company’s last three buybacks, which were all through open market transactions.

The buyback fits into Infosys’ broader capital allocation policy of returning 85% of free cash flow to shareholders over FY25-29. The company returned about 52% of its FCF through dividends in FY25.