Buyback Alert: Infosys Stock Falls 1.5% Ahead Of First Share Buyback In 3 Years; 5 Key Points

The share price of Infosys declined sharply by more than 1.5% and traded near its day's low on Thursday, ahead of its share buyback announcement. Infosys has a long history of buybacks. The last share repurchase was carried out in 2022.

1. Infosys Share Price:

At the time of writing, Infosys traded at Rs 1509.90 apiece on BSE, down by 1.48% with a market cap of Rs 6,27,271.68 crore. The IT heavyweight stock is near its day's low of Rs 1,508 apiece. The stock opened lower at Rs 1,530.

2. Infosys Buyback Announcement:

In its regulatory filing, the company said that the Board of Directors ("Board") of Infosys Limited ("Company") will consider a proposal for buyback of fully paid-up equity shares of the Company at its meeting to be held on September 11, 2025, in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended.

Kotak Securities believes that the upcoming buyback would be worth Rs 13,560 crore at a premium price of 25% from the current market price.

For Infosys' 26 lakh shareholders, the buyback-if via the tender route-offers a chance to exit at a premium, while long-term investors benefit from improved EPS and higher return ratios. Analysts note that compared to dividends, buybacks are more tax-efficient for many retail investors, as per Kotak's note.

3. Infosys Buyback History:

The upcoming buyback will be Infosys' 5th since 2017.

Since 2017, Infosys has delivered four buybacks, with the latest one carried in 2022. Infosys carried a buyback of Rs 9,300 crore in 2022, at a minimum buyback price of Rs 1,850 per share, which was at a premium from its trading price. This buyback was open from December 7, 2022 to February 13, 2024, and Infosys bought back at least 50 million equity shares from shareholders.

4. What Is A Buyback?

In simple words, buyback means a listed company can buy back shares from their respective shareholders including the public shareholders.

As per ZERODHA's FAQs, generally, companies buyback shares at a price higher than the current market price. There are two types of buyback: tender offer and open market offer. Companies can choose either of these methods to buy back shares from their shareholders.

5. Strategic Benefits of Buyback for Infosys

There are five strategic benefits for buyback in Infosys, as per Kotak:

- The company reduced outstanding shares, enhancing Earnings Per Share (EPS) and Return on Equity (ROE).

- Buybacks help neutralise dilution from Employee Stock Option Plans (ESOPs) and Restricted Stock Units (RSUs), a strategy Infosys has consistently followed.

- Buyback signal undervaluation; Infosys stock fell 24% YTD in 2025, prompting management to act.

- Buybacks utilise surplus cash without committing to long-term capex. Infosys' free cash flow in Q1 FY2026 was $884 million, enabling non-disruptive capital deployment.

- Buybacks offer tax-efficient shareholder returns compared to dividends, especially for long-term investors.

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