Infosys Share Buyback 2025 – What Investors Need to Know

Infosys, one of India’s leading IT companies, has announced its largest ever share buyback program worth ₹18,000 crore. The buyback price has been fixed at ₹1,800 per share, which is almost 19% higher than its recent market price. This news has created a buzz in the stock market and among investors.

In this blog, we will break down what the Infosys buyback means, why the company is doing it, and what impact it could have on shareholders.

What is a Share Buyback?

A share buyback, also known as share repurchase, is when a company buys back its own shares from existing shareholders. By doing this:

The total number of outstanding shares in the market decreases.
Earnings per share (EPS) often increase because profits are distributed over fewer shares.
It signals that the company has strong cash reserves and believes its stock is undervalued.
Shareholders get an option to tender their shares and receive money at a premium price.

Key Highlights of the Infosys Buyback

Total Buyback Size: ₹18,000 crore
Buyback Price: ₹1,800 per share
Premium Offered: Around 19% higher than market price before announcement
Number of Shares: Up to 10 crore equity shares
Equity Percentage: About 2.41% of the company’s paid-up equity share capital
Route: Tender offer (shareholders can submit shares during a specific period)

Why is Infosys Doing This Buyback?

There are several reasons why Infosys may have chosen to announce this buyback now:

Strong Cash Position – Infosys has built up large cash reserves and wants to return part of it to shareholders.
Rewarding Shareholders – By offering a premium price, shareholders get direct value creation.
Boosting EPS and Valuations – Reducing the number of shares outstanding increases earnings per share, which can make the stock look more attractive.
Market Confidence – It sends a strong message that the management believes in the company’s future growth.
Balancing Dividends and Buybacks – Instead of only dividends, Infosys is also using buybacks as a way to distribute wealth.

Benefits for Shareholders

Attractive Premium – Shareholders who participate can sell their shares at ₹1,800, which is higher than the market price.
EPS Improvement – For long-term holders, fewer shares mean higher earnings per share.
Ownership Increase – If you do not sell, your percentage of ownership slightly increases as the total number of shares goes down.
Flexibility – Investors can choose whether to participate or continue holding.

Risks and Limitations

While buybacks are generally positive, investors should also be aware of the risks:

Short-Term Boost – Buybacks may improve stock price in the short run but do not guarantee long-term growth.
Opportunity Cost – Money used for buyback could have been invested in new projects, acquisitions, or innovation.
Overvaluation Risk – If the stock is already fairly valued, buying back at a premium may not create real value.
Limited Size – This buyback covers only 2.41% of equity, so the overall effect on ownership and price may be modest.

What Should Investors Do?

If you are looking for short-term profit, tendering shares at ₹1,800 can give you quick returns.
If you believe in Infosys’ long-term future, holding the stock may be more beneficial, as the buyback could support higher valuations and EPS growth.
Keep track of the record date, tendering process, and final acceptance ratio to make an informed decision.

Final Thoughts

The Infosys ₹18,000 crore share buyback is a major event in the Indian stock market. It highlights the company’s strong financial position, confidence in future growth, and commitment to shareholder value.

For investors, this is an opportunity to either book profits at a premium or stay invested and enjoy long-term benefits from a reduced share base and improved earnings per share.

Overall, the buyback looks like a positive move for shareholders, but like any investment decision, it should be weighed carefully against individual goals and risk appetite.

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