Infosys Share Buyback 2025: History, Analysis, and What Investors Should Know

Here’s a detailed analysis of the recent Infosys share buyback announcement, how it works, and what it might mean for different kinds of investors.

Infosys Share Buyback – Key Facts:

• Infosys approved a share buyback worth ₹18,000 crore via the tender offer route.
• Price per share for the buyback: ₹1,800.
• This is about 2.41% of the company’s equity.
• Premium over the current market price: ~19%.

🤔 Why Did Infosys Do the Buyback? (Background & Motive):

1. Strong Cash Reserves & Free Cash Flow:
   • Infosys has been generating good cash flow. Mint report says FY25 free cash flow ~ $4.1 billion.
   • Also, company has earlier committed to returning a large portion of free cash flow to shareholders.
2. Valuation Looks Attractive to Management:
   • Shares have been weak YTD. Market sentiment meh. So buyback signals ki company feels stock is undervalued.
3. Signal of Confidence:
   • Companies do buybacks to show they believe in their long-term prospects. Triggers confidence in investors.
   • Especially important for IT sector, which is seeing pressure from global macro risks and slowing demand.
4. Improve Financial Ratios:
   • Reducing number of shares improves Earnings Per Share (EPS), Return on Equity (ROE), etc.
   • Helps performance metrics. Institutional investors often look at such metrics.

📈 What Effects Will It Have?

⚠️ Risks / Things to Watch Out For

• Premium Size & Tender vs Open Market Route: If the premium is small, benefit is less. Infosys chose tender offer route, which gives specified shareholders the option to sell.
• Opportunity Cost: Instead of buying back shares, company could use excess cash to invest in growth (AI, new markets, acquisitions). If growth slows, buyback alone won’t fix weak revenue trends.
• Macro Risks: Global IT demand, currency risk, US regulation / tariffs, visa policies — all could affect future revenue. Buyback helps mood, not necessarily fundamentals.
• Tax Impact: Shareholders selling shares back might have tax obligations. India’s tax laws changed for buybacks (Finance Act 2023) — shareholders not companies pay tax.

💡 What Should Different Investors Do:?

• For Short-Term Traders: Good opportunity. Buy on announcement, maybe exit after premium effect. But watch for market reaction after buyback results.
• For Long-Term Investors: Positive signal. If company executes well and keeps up growth, this improves value. But don’t ignore fundamentals.
• For Income Seekers: Buybacks are not like dividends. They give benefit, but not regular cash flow. If you rely on dividends, continue evaluating that.

📜 Infosys Buyback History

Infosys has been rewarding shareholders with dividends + buybacks since 2017. Let’s look at the timeline:

🔹 2017 – First Ever Buyback

• Size: ₹13,000 crore
• Price: ₹1,150 per share
• Mode: Tender offer route
• Shares bought: ~11.3 crore (4.9% of equity)
• Significance: This was Infosys’ first-ever buyback and one of the largest in the Indian IT sector at the time.

🔹 2019 – Second Buyback

• Size: ₹8,260 crore
• Price: ₹800 per share
• Mode: Open market
• Shares bought: ~11.05 crore (2.36% of equity)
• Note: Open market route meant shareholders couldn’t directly tender shares, company bought from exchanges.

🔹 2021 – Third Buyback

• Size: ₹9,200 crore
• Price: ₹1,750 per share
• Mode: Open market
• Shares bought: ~5.25 crore (1.23% of equity)
• Context: Happened during COVID recovery phase; Infosys showed confidence in its cash reserves and strong business momentum.

🔹 2022 – Fourth Buyback

• Size: ₹9,300 crore
• Price: ₹1,850 per share
• Mode: Open market
• Shares bought: ~5.02 crore (1.19% of equity)
• Outcome: Successful completion, helped in improving EPS and rewarding long-term investors.

🔹 2025 – Fifth & Biggest Ever Buyback (Current)

• Size: ₹18,000 crore
• Price: ₹1,800 per share
• Mode: Tender offer route
• Shares planned: ~10 crore (2.41% of equity)
• Premium: ~19% over current market price
• Note: Largest in Infosys history and one of the biggest in Indian IT space.

🧾 Key Observations from History

1. Infosys alternated between tender route (2017, 2025) and open market route (2019, 2021, 2022).
2. Tender route is usually better for retail investors (direct participation).
3. Buyback sizes have steadily increased → shows Infosys’ strong cash generation ability.
4. Every buyback improved EPS, ROE and gave confidence to investors.

✅ Final Take

Infosys has consistently used buybacks as a way to reward shareholders, along with dividends. The 2025 buyback (₹18,000 crore) is the biggest, showing both confidence in the company’s future and commitment to returning cash to shareholders.

For long-term investors, this consistency builds trust. For short-term traders, buybacks often create a good opportunity around the premium announcement.