Infosys ₹18,000 Cr Buyback: Retail Investors Win Big with 2:11 Entitlement Ratio

In a move that underscores its robust financial health and commitment to shareholder value, Infosys Limited has disclosed the share entitlement ratios for its landmark ₹18,000 crore buyback program, the largest in the company's history. Announced via a regulatory filing on Wednesday, the buyback will open on November 20 and close on November 26, allowing eligible shareholders to tender their equity shares at a premium. The record date for determining eligibility was November 14, capturing a snapshot of the shareholder roster amid the company's ongoing strategy to return surplus cash—aligning with its policy of distributing approximately 85% of free cash flows through dividends, buybacks, and special payouts over multi-year periods.

The ratios reflect a tiered structure designed to favor smaller investors, in compliance with SEBI's Buyback Regulations. For retail or small shareholders—defined as those holding equity shares with a nominal value of up to ₹2 lakh as on the record date—the entitlement is set at 2:11, meaning two shares will be accepted for every 11 held, translating to an effective acceptance ratio of 18.1%. This category is reserved 15% of the total buyback size, amounting to ₹2,700 crore, ensuring higher participation rates for individual investors.

In contrast, the general category, encompassing institutional and non-institutional investors, faces a more stringent 17:706 ratio—or 17 shares for every 706 held—yielding a 2.4% acceptance rate. This disparity aims to democratize benefits while adhering to the overall cap of repurchasing up to 10 crore equity shares, representing just 2.41% of the total paid-up capital.

Infosys' decision to pursue this buyback follows board approval on September 11, 2025, and comes at a time when the IT giant boasts a strong balance sheet, with revenue growth of 5% and profit after tax up 2% for the fiscal year ending March 31, 2025. Priced at ₹1,950 per share—a premium over recent market trading levels around ₹1,800 as of mid-November—the offer provides an attractive exit opportunity, particularly for retail holders.

However, unlike previous buybacks where proceeds were tax-exempt for individuals, the 2025 iteration introduces new taxation under the Finance Act: gains will be treated as dividends, taxable at slab rates, though no TDS applies if total dividends and buyback income stay below ₹10,000 for residents. Analysts estimate post-tax returns could still yield 5-10% profitability for moderate holdings, depending on oversubscription and the final acceptance ratio, which may dip lower if small shareholder participation surges due to the favorable terms.

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Historically, Infosys has executed buybacks strategically to enhance earnings per share and signal confidence in its growth trajectory. The 2017 program repurchased 4.9% of equity for ₹9,000 crore—nearly double the current percentage but half the size—while the 2021 effort clocked in at ₹9,200 crore. This ₹18,000 crore initiative, representing 24.31% of standalone free reserves as of June 30, 2025, not only eclipses predecessors in scale but also aligns with the company's investments in AI, cloud, and sustainability, including its carbon-neutral status since 2020. For non-participants, the buyback promises an automatic increase in ownership percentage, potentially boosting future dividends.

As the tender window approaches, shareholders are urged to update demat details via platforms like KFintech and consult tax advisors. With Infosys' global footprint—serving over 50 countries and partnering with innovators like Siemens and Lufthansa—this buyback reinforces its position as a blue-chip staple, offering both immediate liquidity and long-term optimism in a dynamic tech landscape.

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