Infosys Share Price Rises on Rs.18,000 Crore Buyback - What Investors Should Know
Infosys’ share price surged by more than 2% on September 12, touching Rs.1,539.90 in early trade, after the board approved a massive Rs.18,000 crore buyback. The buyback, priced at Rs.1,800 per share, comes at a premium of 19% over its last close of Rs.1,509.70, making it a strong positive signal for the market.
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Buyback Plan Details
According to the September 11 exchange filing, the buyback will not exceed 25% of Infosys’ paid-up capital and will cover 2.41% of its equity. This is Infosys’ fifth buyback and the largest so far, shifting from the open-market method used earlier to a tender offer route. The record date for eligibility will be announced soon.
Why Infosys Chose Now
The timing of the buyback is interesting, as it comes amid heavy selling by foreign investors in Indian IT stocks. FIIs pulled out nearly Rs.31,000 crore in July and August alone. Analysts believe the move is Infosys’ way of reassuring investors and showing confidence in its growth prospects despite global uncertainties.
Analyst Views and Ratings
Morgan Stanley maintained an “Equal Weight” rating with a Rs.1,700 target, calling the move a “vote of confidence.” Fund managers expect the buyback to boost EPS by 3–5%, supported by Infosys’ strong balance sheet of Rs.40,000 crore in cash. Nomura, on the other hand, has a “Buy” rating with a higher target of Rs.1,880, citing a 4.4% dividend yield and shareholder-friendly policies.
Shareholder Benefits
Infosys has promised to return 85% of its free cash flow (FCF) to shareholders between FY25 and FY29. In FY25, nearly 52% of FCF was distributed through dividends. With the current buyback and expected dividends, the company may return more than 100% of FY26F FCF, providing shareholders both short-term and long-term value.
Growth Outlook Ahead
Despite the positive buyback move, growth remains a concern. Nomura projects USD revenue growth of just 3.8% in FY26F, including contributions from acquisitions. Experts argue Infosys should also focus on investing in emerging technologies like AI, quantum computing, and startups to strengthen its long-term strategy.
Final Take for Investors
For shareholders, Infosys’ buyback brings immediate value with a premium payout and potential EPS accretion. Along with strong dividend commitments, it ensures solid returns even as overall IT sector growth remains muted. The move underlines Infosys’ confidence in navigating near-term challenges while rewarding its investors.
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