Infosys Share Buyback Update and Market Reaction

Infosys Ltd. shares experienced a gain of up to 3% following an announcement regarding its $\text{₹}18,000$ crore share buyback, the company's largest ever. In an October 22 update to the exchanges, Infosys confirmed that the promoter group, including key figures such as Nandan Nilekani and Sudha Murty, has opted not to participate in the buyback. The promoter group held a 14.3%$stake in the company at the end of the September quarter. This decision by the promoters to not tender their shares is typically viewed by the market as a vote of confidence in the company's long-term prospects. Furthermore, their non-participation is expected to favorably impact the retail entitlement ratio when the buyback process commences, as their shares were excluded from the entitlement ratio calculation. The buyback involves repurchasing 10 crore shares at a price of ₹1,800 per share, representing a 22% premium over the previous day's closing price. The company is yet to announce the entitlement ratio, record date, and other critical dates for the buyback. This positive market reaction occurs despite recent analyst disappointment following Infosys's September quarter results, where the company only marginally raised the lower end of its revenue growth guidance from 1%-3% to 2%-3%, leading to projections of a potentially softer second half of the financial year.