Infosys ₹18,000 Crore Buyback – What It Means for Shareholders?

Infosys, India’s second-largest IT company, has announced its biggest-ever share buyback of ₹18,000 crore. The company will repurchase shares at ₹1,800 per share, which is about 19% higher than its last closing price of ₹1,509. What is a Buyback? A buyback means the company purchases its own shares from existing shareholders. After this, the total number of shares in the market reduces, which usually supports the stock price and increases earnings per share (EPS). Infosys will do this buyback through the tender offer route (shareholders can choose to sell shares at the decided price). Why Infosys is Doing This? • Infosys has over ₹42,000 crore cash and strong free cash flow (₹20,000+ crore in FY25). • The company has a policy to return 85% of its free cash flow to shareholders via dividends and buybacks. • This buyback is a way to reward shareholders and show confidence in its business despite near-term challenges. Impact on Stock & Company • The buyback price is attractive (₹1,800 vs ₹1,509 market price). Shareholders may benefit if they participate. • Reducing shares in the market generally improves financial ratios like EPS, making the stock look stronger. • The buyback also signals that Infosys believes its stock is undervalued, which can boost investor confidence. Risks to Note • IT sector faces global uncertainty (like US tariffs, weak demand). • If business growth slows, buyback alone cannot push prices up for long. In short: The buyback is positive for shareholders in the short term and shows confidence from Infosys. But future stock performance will still depend on IT demand and company growth.