Infosys has announced a share buyback worth ₹18,000 crore. The company will purchase 10 crore shares at a rate of ₹1,800 per stock. This will offer investors a premium of approximately 19%, and the company's Earnings Per Share (EPS) may increase. This is considered the largest buyback in the IT sector.
Share buyback: India's second-largest IT company, Infosys, made a significant decision on Thursday by announcing a share buyback worth ₹18,000 crore. The company will acquire 10 crore shares at ₹1,800 per share, which is 19% higher than the current market price. This buyback will be entirely in cash and will be less than 25% of the total paid-up capital and reserves. The buyback will reduce the number of Infosys shares, thereby increasing Earnings Per Share (EPS) and benefiting investors. The company has previously conducted buybacks in 2017, 2019, and 2021.
What is a share buyback
A share buyback simply means when a company buys back its own shares. Doing so reduces the total number of the company's shares in the market. This increases the value of the remaining stake. Companies typically undertake buybacks when they believe their shares are undervalued in the market or when they have surplus cash that they wish to return to investors.
How Infosys's buyback will work
Infosys has informed the market that this buyback will be conducted entirely in cash. The company has clarified that its size will be less than 25% of its total paid-up capital and free reserves. This calculation is based on audited financial data as of June 30, 2025. The company has stated to investors that this move will create value for shareholders.
Investors will receive significant benefits
Suppose Infosys currently has 100 crore shares. The company has decided to buy back 10 crore of these shares. If the share price is ₹1,800, the company will have to spend 10 crore * ₹1,800, totaling ₹18,000 crore. This will provide direct cash benefits to shareholders.
Now, if the company's annual earnings are ₹25,000 crore, the initial Earnings Per Share (EPS) was ₹25,000 crore / 100 crore = ₹250. However, after the buyback, the total number of shares will reduce to 90 crore. In this scenario, the EPS will increase to ₹25,000 crore / 90 crore = approximately ₹277. When EPS increases, the value of a company's shares also tends to rise.
Why this decision is significant for investors
Market experts believe that buybacks increase investor confidence. When a company buys back its own shares, it signals that it has full confidence in its business and future prospects. It also indicates that the company is not facing any cash crunch. Infosys's move will not only provide good returns to investors but also enhance the company's value.
Previous buybacks
This is not the first time Infosys has announced a share buyback. The company has previously undertaken share buybacks in 2017, 2019, and 2021. Each time, the company has delivered benefits to its shareholders. This buyback is considered the largest in the IT sector to date.
The largest buyback in India to date was conducted by Mukesh Ambani's company, Reliance Industries. However, Infosys's current buyback is also substantial and is considered a record-breaking event in the IT sector.
