On a Thursday evening, once markets had closed, Infosys, the Bengaluru firm long regarded as one of India's steadiest technology exporters, offered to buy back shares worth ₹18,000 crore at ₹1,800 each, a premium of roughly a fifth over the price at which the stock had settled that day. It is the largest such move the company has made since its 1995 listing, and it arrives at a moment when the shares sit a quarter below their peak, asking shareholders to decide whether a company with surplus cash should return some of it to them or hold it for what comes next.
Infosys Buyback at ₹1,800 a Share Puts Investors' Buy, Sell or Hold Question Back in Focus
The largest buyback since Infosys listed in 1995, at a 19% premium
Mark
Start with the headline number. What is Infosys actually offering?
Mimi
₹18,000 crore to buy back about 10 crore shares, 2.41% of equity, at ₹1,800 each. That's 19% above Thursday's close of ₹1,512, and it's the biggest buyback since the 1995 listing.
Mark
So anyone holding shares can cash in at ₹1,800?
Mimi
Not automatically. It's a tender offer, so shareholders on the record date can offer shares, and the company takes only a portion. The record date hasn't been announced yet.
Luke
And the whole thing still needs shareholder approval. It's announced, not done.
Mark
Why does the retail quota matter?
Mimi
Sebi requires at least 15% reserved for holders of up to ₹2 lakh. Palviya of Axis Securities expects 20-35% this time. Past retail acceptance was 100% in 2017, 30-40% in 2019 and 25-30% in 2022.
Luke
Keep in mind that 20-35% is one analyst's expectation, not a disclosed figure. The actual ratio depends on how many shares get tendered, which we won't know until later.
Mark
Analysts sound bullish. How solid is that?
Mimi
They offer targets from ₹1,600-1,660 up to ₹1,700-1,800, plus a 3-5% EPS boost estimate from Badjate. Dewan also noted the last buyback didn't help over the long run.
Luke
Those targets are individual opinions, and the article carries a disclaimer to that effect. The EPS estimate is Badjate's projection. What's confirmed is the offer terms and the stock's price history. Whether it rallies is unknown.
Mark
What's the unresolved question?
Mimi
What management does with its cash beyond this. Badjate wanted a clear investment plan, and the article doesn't say whether one is coming.
Il Polso
- A 19% premium on a buyback offer has put the stock under immediate pressure to justify the gap between market price and tender price.
- The shares rallied more than 6% in two sessions yet remain about 25% below their 52-week high, leaving investors split between chasing momentum and waiting for dips.
- Shareholder approval, a yet-to-be-announced record date, and the Sebi-mandated retail quota must all fall into place before the tender window can open.
- Analysts are cautiously bullish, with targets between ₹1,600 and ₹1,800, but one voice warns that the cash could be better deployed in AI, quantum computing or new ventures.
On a Thursday evening, once markets had closed, Infosys, the Bengaluru firm long regarded as one of India's steadiest technology exporters, offered to buy back shares worth ₹18,000 crore at ₹1,800 each, a premium of roughly a fifth over the price at which the stock had settled that day. It is the largest such move the company has made since its 1995 listing, and it arrives at a moment when the shares sit a quarter below their peak, asking shareholders to decide whether a company with surplus cash should return some of it to them or hold it for what comes next.
Late on a Thursday, after the market had closed, Infosys announced the largest buyback in its history: ₹18,000 crore, offered at ₹1,800 a share. The price sat 19% above the day's close of ₹1,512, a stock that had slipped 1.3% in that session. The Bengaluru company, India's second largest IT services firm, plans to repurchase about 10 crore shares, roughly 2.41% of its equity, through the tender route. Shareholders on the record date, not yet announced, may offer their shares within a limited window, and the plan still needs shareholder approval.
The stock has been moving through a difficult stretch. It climbed more than 6% in the two sessions after the buyback news surfaced on Monday, yet still trades about 25% below its 52-week high of ₹2,006.45 and below both its 50-day and 200-day averages.
Analysts see opportunity in the dip. Nilesh Jain of Centrum Broking expects a gradual climb toward ₹1,600 to ₹1,660, while Anuj Gupta of Ya Wealth Global Research targets ₹1,700 to ₹1,800 in the short term. Retail investors, holding shares worth up to ₹2 lakh, receive a reserved slice of at least 15%, and Rajesh Palviya of Axis Securities expects their acceptance to reach 20 to 35%, based on past buybacks.
Not everyone is convinced the plan is sound for the long run. Akshay Badjate of Merisis PMS notes that Infosys holds over ₹40,000 crore in cash and generates more than ₹30,000 crore in free cash flow each year, and that the buyback could lift earnings per share by 3 to 5%. Yet he regrets that management has not yet spelled out how it will invest the surplus in AI, quantum computing or startups. The question left hanging is whether returning cash now serves shareholders better than a clear plan for what the company builds next.
Late on a Thursday, after the market had closed, Infosys announced the largest buyback in its history: ₹18,000 crore, offered at ₹1,800 a share. That price is a 19% premium to the day's closing level, and the stock had finished that session at ₹1,512, down 1.3%.
The Bengaluru-based company, India's second largest IT services firm, plans to repurchase about 10 crore shares, or 2.41% of its equity. It will use the tender route, which means the company offers to buy a set number of shares at a fixed price above the market, and shareholders can tender their shares during a limited window. Infosys listed in 1995, and nothing it has done since matches this in size. The offer covers everyone who is an equity shareholder on the record date, which has not yet been announced. It also still needs shareholder approval.
The stock arrives at this moment in a mixed state. It rose more than 6% over the two sessions before Thursday, reacting to the buyback news that surfaced on Monday. Even so, it sits about 25% below its 52-week high of ₹2,006.45. It also trades beneath both its 50-day simple moving average of ₹1,519.1 and its 200-day average of ₹1,664.5.
The analysts quoted by The Economic Times lean toward buying on dips. Nilesh Jain of Centrum Broking calls the stock a portfolio pick at corrected levels and expects a gradual move toward ₹1,600-1,660, with support at ₹1,440. Anuj Gupta of Ya Wealth Global Research sees short-term targets of ₹1,700-1,800. He says new buyers can enter on dips, while existing holders should stay put for the medium to long term.
Retail investors, meaning those holding shares worth up to ₹2 lakh on the record date, get a reserved slice. Sebi rules require at least 15% of a buyback to be set aside for them. Rajesh Palviya of Axis Securities expects 20-35% this time, given the size of the offer. He pointed to past Infosys buybacks, when the retail acceptance ratio was 100% in 2017, 30-40% in 2019 and 25-30% in 2022. The ratio matters because it determines how many of a small investor's shares the company actually takes.
Market expert Neeraj Dewan argues the timing is better than last time. The previous buyback, he said, did not help the stock in the medium to long term, but valuations are now more attractive and the shares have been consolidating at lower levels. Depending on the premium, he said, investors could find an arbitrage opportunity, and the buyback premium could also give short-term upside.
Akshay Badjate of Merisis PMS pointed to the company's finances. Infosys holds more than ₹40,000 crore in cash and liquid investments and generates over ₹30,000 crore in free cash flow each year. He estimates the buyback could lift earnings per share by 3-5%, supporting the price in the near term. He also voiced a reservation: for the longer term, management would have done better to lay out a clear plan for investing excess cash in areas such as AI research, quantum computing or startups.
The views are the analysts' own, not those of the publication. The next markers to watch are the record date, the retail acceptance ratio, and whether Infosys says more about what it intends to do with the cash it keeps.
Citazioni salienti
The buyback could support the stock price in the near term by boosting EPS by 3-5%, but management should have laid out a clear plan for investing excess cash.— Akshay Badjate, Fund Manager, Merisis PMS
The last buyback didn't help in the medium to long term, but this time valuations are more attractive.— Neeraj Dewan, market expert
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