The board of Infosys Ltd accredited a Rs 18,000-crore share buyback on Thursday, making it the largest-ever repurchase of securities within the IT main’s historical past. The buyback, which might be by means of the tender provide route, is priced at Rs 1,800 per fairness share. Infosys plans to buyback as much as 10 crore shares with a face worth of Rs 5 every. The announcement comes amid a virtually 20 per cent fall within the firm’s share value since January this yr.
A buyback, also called share repurchase, is when a listed firm buys its personal shares from current shareholders. The method reduces the variety of excellent shares within the open market over a interval which might result in higher valuation and incomes per share (EPS). It’s one other manner of paying dividends to shareholders by corporations.
At present, an organization should buy again its shares from shareholders on a proportionate foundation by means of tender provide, or from the open market by way of book-building course of, or from the odd-lot holders. The utmost restrict of any buyback is 25 per cent or much less of the mixture of paid-up capital and free reserves of an organization.
Underneath the inventory alternate route, an organization should buy again shares solely on the inventory exchanges having nationwide buying and selling terminals. The buyback is made solely by means of the order matching mechanism.
Tender provide means a proposal by an organization to purchase again its personal shares or different specified securities by means of a letter of provide from the holders of the shares or different specified securities of the corporate. The buyback is completed on a proportionate foundation as per the buyback ratio, and the extra shares tendered over and above the prescribed buyback ratio get accepted if there are any unaccepted shares.
Infosys’ share buyback
Bengaluru-based tech blue chip firm, Infosys Ltd, on September 11, introduced that it has acquired a board approval to buyback fairness shares for an quantity of Rs 18,000 crore at a value of Rs 1,800 per fairness share, a 19 per cent premium to the closing value of Rs 1,509.5 apiece on September 11.
The provide, which might be performed by means of the tender provide route, contains a purchase order of 10 crore fairness shares of the corporate of face worth of Rs 5 every. This types as much as 2.41 per cent of the corporate’s complete paid-up fairness share capital.
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The share buyback is the fifth and the biggest by Infosys. In 2017, the corporate launched a Rs 13,000 crore of buyback, adopted by Rs 8,260 crore in 2019, Rs 9,200 crore in 2021 and Rs 9,300 crore in 2022.
The rationale
“The corporate has a money reserve of almost Rs 24,455 crore. They imagine that inventory has fallen down considerably however there may be important worth within the firm, and so, they’re in search of a buyback,” mentioned Sumit Pokharna, Vice President and analyst, Kotak Securities.
Since January this yr, Infosys share value has fallen by 20 per cent amid geopolitical uncertainties and commerce tensions.
The buyback announcement of Infosys comes towards the backdrop of Indian IT corporations more and more leaning on buybacks to return money to buyers. Knowledge exhibits that Wipro, HCL Tech and TCS have all tapped this route lately, a report by Motilal Oswal Monetary Companies mentioned.
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In line with a report by Nomura Analysis, the buyback to be largely incomes per share (EPS)-neutral in FY26. Infosys had famous that it expects dividends to extend progressively yearly (in FY25 it had paid a dividend of Rs 43 per cent share).
How shareholders could acquire
The good thing about collaborating in Infosys’ share buyback will rely upon the tax bracket of a shareholder. Will probably be extra tax environment friendly for some retail and long-term shareholders. As of June 30, 2025, the whole variety of resident people holding nominal share capital as much as Rs 2 lakh within the firm stood at Rs 24.86 lakh.
The present tax coverage says that the share gross sales proceeds could be thought of as dividend and might be taxed. On the similar time, the price of buy might be a capital loss relying on how lengthy the shareholder has been holding the shares, Pokharna mentioned.
The tax might be payable by the recipient shareholder on the whole quantity acquired from the buyback as deemed dividend beneath part 2(22) (f). The price of acquisition might be carried ahead as deemed capital loss and could be utilized towards the long run positive aspects from sale of remaining shares, he mentioned.
