Details About Infosys' ₹18,000 Crore Share Buyback

On September 11, 2025, Infosys, India’s 2nd largest IT company, approved its biggest-ever share buyback programme, amounting to ₹18,000 crore. The buyback price is set at ₹1,800 per share, a premium over the stock’s recent market price. The company states that this buyback will be done via the tender offer route, and will represent approximately 2.41% of its paid-up capital. The record date for eligibility has not yet been announced.

While the announcement made headlines, understanding what a buyback means and how it works helps put this development into perspective.

What is a Share Buyback?

A share buyback, also known as a share repurchase, is a corporate action where a company buys back its own shares from existing shareholders. This reduces the total number of shares available in the market.

There are two main ways companies typically conduct buybacks:

• Open Market Route: The company buys shares directly from the stock exchange like any investor. (This method has now been phased out by SEBI)
• Tender Offer Route: The company invites shareholders to tender (sell) their shares within a specific period at a pre-decided price, usually higher than the market price.

Since SEBI has completely phased out the open market method, companies can now only use the tender offer route for buybacks.

With the mechanics clear, the next logical question is, why would a company spend thousands of crores buying back its own stock?

Why Companies do Buybacks?

Buybacks aren’t just financial housekeeping, they serve strategic purposes. Companies may do them to:

• Boost Shareholder Value: Reducing the number of shares increases Earnings per Share (EPS), which often improves valuations.
• Efficient Use of Cash: Instead of keeping idle cash or only paying dividends, buybacks return money to shareholders in a tax-efficient way.
• Signal Undervaluation: When management feels the stock is undervalued, a buyback is a way to show confidence in the company’s fundamentals.

Infosys fits this pattern, guided by its capital allocation policy of returning 85% of free cash flow over five years to shareholders through dividends and buybacks. With that context, let’s dive into the specifics of this year’s announcement.

Key Details of Infosys’ ₹18,000 Crore Buyback

Here are the highlights of Infosys’ announcement:

• Buyback Size: ₹18,000 crore – the largest in the company’s history.
• Buyback Price: ₹1,800 per share.
• Premium Offered: More than 19% above the stock’s previous closing price of ₹1,509.70 on 11th September 2025.
• Share Capital Impact: The buyback represents 2.41% of the company’s shares and is within SEBI’s limit of not exceeding 25% of paid-up capital.
• Funding: From free reserves, supported by over ₹42,000 crore in cash and equivalents, and over ₹20,000 crore in free cash flow in FY25.
• Record Date: Yet to be announced (investors must hold shares before the record date to be eligible).

Notably, the stock reacted positively to the news, gaining over 2% intraday after the announcement. But to fully understand its significance, it’s worth looking back at Infosys’ history with buybacks.

Infosys’ History of Corporate Actions

Infosys has consistently rewarded shareholders through splits, bonuses, and buybacks. Here’s a look at its track record since IPO:

• Stock Split: 1 split in Feb 2000 (2-for-1; face value reduced from ₹10 to ₹5).
• Bonus Issues: Eight bonus issues (1994, 1997, 1999, 2004, 2006, 2014, 2015, 2018). Ratios ranged from 1:1 to 3:1.
• Buybacks: Five buybacks (2017, 2019, 2021, 2022–23, and 2025).

Timeline of Key Events

This long history shows how Infosys regularly uses corporate actions as a way to balance growth investments with shareholder returns.

How does Infosys' Buyback affect Investors?

The implications for investors depend on individual choices and circumstances:

• Tender at a premium: Shareholders can sell at ₹1,800 per share, higher than current market prices.
• Hold and gain ownership: Those who don’t tender will own a slightly larger share of Infosys as the number of outstanding shares declines.
• Short-term stock moves: Prices often see near-term support after such announcements, though longer-term trends depend on fundamentals.
• Tax considerations: Proceeds from tendered shares may attract capital gains tax, depending on holding period.

So should one participate or hold on? That leads to the next important discussion.

Should You Participate in the Infosys Buyback?

There isn’t a single right answer. The choice depends on your investment goals and horizon:

• Short-term investors might see this as an opportunity to lock in profits at a premium.
• Long-term investors may prefer holding, benefiting from higher relative ownership and Infosys’ continued focus on shareholder returns.

What’s clear is that the buyback is consistent with Infosys’ policy, but the decision ultimately rests with each investor.

Conclusion

Infosys’ ₹18,000 crore buyback is notable for its size and timing. While it highlights strong cash flows and management’s intent to return capital, its actual impact on shareholder wealth will vary.

Some may take the opportunity to exit at a premium, while others may see value in staying invested. Either way, the buyback is another step in Infosys’ consistent strategy of balancing growth with shareholder rewards.

FAQs on Infosys Share Buyback

1. Am I eligible to participate in the Infosys buyback?

Eligibility is determined by the record date, which Infosys will announce. Only shareholders who hold shares in their demat account on that date can participate in the buyback.

2. How do I tender my shares in the buyback?

You can submit your shares through your broker or trading platform once the tender offer window opens. The process is usually available in the corporate actions section of your demat/trading account.

3. Will all my tendered shares be accepted?

Not necessarily. Acceptance depends on the entitlement ratio (minimum shares Infosys must accept from all eligible shareholders) and the overall number of shares tendered. If more shares are offered than the buyback size, acceptance happens on a proportionate basis.

4. What price will I get if my shares are accepted?

All accepted shares will be bought at the fixed buyback price of ₹1,800 per share, regardless of the market price at the time of tendering.

5. What happens if I don’t participate in the buyback?

If you choose not to tender, you simply continue holding your shares. Since the total number of outstanding shares reduces after the buyback, your percentage ownership in Infosys slightly increases.