Infosys Plans ₹13,560 Crore Share Buyback

Infosys Ltd., India’s second-largest IT services company, is set to make waves in the financial markets as its board prepares to consider a massive share buyback proposal on Thursday, September 11, 2025. This marks the company’s first share repurchase in three years, with an estimated expenditure of ₹13,560 crore, according to analysis by NDTV Profit. The buyback, expected to be priced at a 25% premium, aims to bolster shareholder value amidst a challenging macroeconomic environment and a 24% year-to-date decline in Infosys’s share price.

The proposed buyback aligns with Infosys’s capital return policy, announced in Q4 FY24, which commits to returning 85% of free cash flow to shareholders over five years through dividends and share repurchases. Morgan Stanley estimates the buyback will cover 1.3–2% of total equity, utilizing approximately 30% of the company’s cash reserves, which stood at ₹45,200 crore in Q1 FY26, against a net worth of ₹95,350 crore. Historically, Infosys has repurchased 14–15% of its net worth during buybacks, with its last program in October 2022 involving ₹9,300 crore to acquire over 50 million shares at ₹1,850 per share.

The announcement comes at a critical juncture for the IT sector, which has faced significant headwinds due to global tariff tensions and economic uncertainty. The NSE Nifty IT index, down 21% in 2025, has been the worst-performing sector, with Infosys shares losing 24% of their value this year, closing at ₹1,436 on Monday, September 8. Despite this underperformance, analysts remain optimistic. Morgan Stanley predicts a potential 60-day rally for Infosys shares relative to the broader market, citing the stock’s attractive valuation and the buyback’s signal of financial stability. The consensus target price for Infosys is ₹1,743, implying a 21.6% upside, with projections ranging from ₹1,440 (0.5% upside) to ₹2,085 (45.5% upside).

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This buyback, the first by a major IT firm since Tata Consultancy Services and Wipro’s repurchases between 2016 and 2023, is seen as a strategic move to cushion the impact of macroeconomic volatility. By reducing the number of outstanding shares, Infosys aims to boost earnings per share (EPS) and enhance shareholder value, signaling confidence in its financial health despite a challenging demand outlook for India’s $283-billion IT sector. The company’s Q1 FY26 results, showing a 9% year-on-year net profit increase to ₹6,921 crore and $3.8 billion in deal wins, further underscore its resilience.

As investors await the board’s final decision, the buyback is expected to provide a much-needed boost to Infosys’s stock, which has lagged behind large-cap peers over the past six months. With the IT giant reaffirming its revenue and margin guidance, the repurchase program could restore investor confidence and stabilize the stock amidst a turbulent market landscape.

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