The Infosys ₹18,000 crore buyback is now official. India’s second-largest IT services company has approved its biggest-ever share repurchase, offering investors a premium price of ₹1,800 per share, nearly 19% higher than its recent closing. This move underscores Infosys’s financial strength and long-term commitment to returning value to shareholders.
Key Details of the Infosys ₹18,000 Crore Buyback
- Buyback Size: ₹18,000 crore (largest in company history).
- Buyback Price: ₹1,800 per share.
- Premium: 19% above the stock’s last traded price of ~₹1,509.50.
- Shares to be repurchased: Up to 10 crore fully paid equity shares.
- Route: Tender offer method, allowing shareholders to submit shares directly.
Market Reaction
- Infosys shares rallied over 2% after the announcement, reflecting strong investor enthusiasm.
- Analysts suggest the buyback will provide a price floor and could support valuations amid ongoing volatility in the IT sector.
Why Infosys is Launching This Buyback
- Boosting Shareholder Value: By repurchasing shares, Infosys aims to enhance Earnings Per Share (EPS) and reward long-term investors.
- Using Strong Cash Reserves: Infosys has built up significant free cash flow, enabling this move without straining finances.
- Stabilizing Stock Price: With shares down nearly 20-23% YTD, the buyback signals confidence in the company’s future.
- Positive Signaling: Large buybacks often indicate management’s belief that the stock is undervalued.
Impact on Investors
- Small Shareholders: Likely to benefit most, as SEBI rules mandate minimum participation quotas for retail investors.
- Long-term Holders: Even if not selling, reduced share count should improve EPS and potentially support higher valuations.
- Market Sentiment: The announcement has been seen as a confidence booster, especially amid global IT spending slowdown.
Looking Back: Infosys Buybacks History
- Infosys has conducted four earlier buybacks (2017, 2019, 2021, 2022).
- The 2022 buyback was worth ₹9,300 crore at ₹1,850 per share.
- The current ₹18,000 crore buyback is nearly double the last one, highlighting growing shareholder focus.
What’s Next
- Record Date: Yet to be announced – this will determine shareholder eligibility.
- Tender Offer Opening: Expected in the coming months once approvals are in place.
- Market Trend: IT sector performance and global demand will still dictate long-term price movement.
Conclusion
The Infosys ₹18,000 crore buyback is not just a financial transaction—it’s a statement of confidence. By offering a 19% premium and doubling the size of its previous repurchase, Infosys is assuring investors of its resilience and cash strength. For shareholders, it represents both an immediate return opportunity and a longer-term support to stock valuations.
