On Friday, September 12, 2025, Infosys announced its fifth share buyback in eight years, worth ₹18,000 crore at a price of ₹1,800 per share. The programme will be carried out through the tender offer route and will cover about 2.41% of the company’s equity. The announcement once again put the spotlight on share buybacks as a tool for rewarding shareholders.
What is a buyback?
A buyback is when a company repurchases its own shares from existing shareholders, either through the open market or via a tender offer. This reduces the total number of outstanding shares. For example, Infosys’ latest buyback aims to retire 10 crore shares, which effectively reduces its equity base.
When the number of shares in circulation falls, each remaining share represents a slightly higher ownership in the company’s profits, thereby lifting earnings per share (EPS) and often improving return ratios.
Why do companies like Infosys do buybacks?
Companies initiate buybacks for several reasons, and Infosys provides a textbook example:
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Return of surplus cash: Infosys, being a cash-rich IT giant, has limited large-scale capex needs. Returning money via buybacks has been a way to deploy excess funds efficiently.
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In 2017, Infosys launched its first major buyback of ₹13,000 crore at ₹1,150 per share, offering a 23% premium over CMP.
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Boost in shareholder value: Buybacks often provide an immediate gain to investors by offering a premium over market price.
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In 2022, the company announced a ₹9,300 crore buyback at ₹1,850 per share, which was a 30.3% premium over CMP — the highest premium it has offered to date.
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Confidence signal: By committing large sums, management signals confidence in future earnings and stability.
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The latest 2025 buyback worth ₹18,000 crore is not only the biggest in Infosys’ history but also the largest in India’s IT sector this year, underlining management’s optimism despite global uncertainties.
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Support for stock price: In volatile markets, buybacks can act as a cushion. For instance, the 2019 buyback worth ₹8,260 crore at ₹747.38 per share came at a time of weak sentiment in global IT services, offering price support to shareholders.
Infosys buyback history at a glance
| Year | Size (₹ Cr) | Price per Share (₹) | Premium over CMP | Route | Equity Impact |
|---|---|---|---|---|---|
| 2017 | 13,000 | 1,150 | 23% | Tender offer | Significant EPS boost |
| 2019 | 8,260 | 747.38 | 18% | Open market | Moderate impact |
| 2021 | 9,200 | 1,648.53 | 25% | Open market | EPS accretive |
| 2022 | 9,300 | 1,850 | 30.3% | Open market | ~1.19% of equity |
| 2025 | 18,000 | 1,800 | 19% | Tender offer | ~2.41% of equity |
How buybacks help shareholders
Buybacks create value for shareholders in two ways:
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For those who tender shares: Shareholders who sell their stock back to the company usually get an attractive premium over the current market price. In the 2025 buyback, investors will receive ₹1,800 per share — a 19% premium to CMP of ₹1,512.20.
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For those who hold on: Reduced share count means higher EPS and potentially improved return on equity (RoE). Over time, this can drive re-rating of the stock, leading to capital appreciation.
Infosys’ track record shows how shareholders have benefited either by tendering in the buyback or by holding for long-term EPS growth. For instance, after the 2017 and 2021 buybacks, Infosys’ EPS rose in subsequent years, supporting valuation expansion.
Why is this buyback significant?
This 2025 buyback is Infosys’ largest ever, at ₹18,000 crore. It is nearly double the size of its earlier buybacks in 2021 and 2022, and the first via the tender offer route since 2017. With ~2.41% of equity targeted, it has a bigger impact on EPS and shareholder returns compared to recent open-market buybacks.
For investors, the move comes at a time when the stock has underperformed peers, trading at ₹1,512.20, offering meaningful upside both through the buyback premium and longer-term earnings growth.
Disclaimer: This article is for informational and educational purposes only and explains the concept of buybacks with reference to Infosys’ filings and past history. Business Upturn does not endorse or recommend any investment decisions. Investors are advised to consult financial experts before making investment choices.
