The share buyback window for Infosys opened today, November 20, and will close on November 26. The Rs 18,000-crore buyback will mark the biggest-ever launched by the IT giant so far.
The buyback price has been set at Rs 1,800 per share. This is the first buyback of shares announced by Infosys since 2022, when the company had agreed to a buyback proposal of Rs 9,300 crore.
At 9:55 am on November 20, Infosys shares were trading in mild green at Rs 1,544 apiece.
Small shareholders, general category:
The buyback has been divided into two categories - reserved (small shareholders) and the general category. The reservation for small shareholders will be 15 percent of the number of equity shares that the company proposes to buy back, or their entitlement, whichever is higher.
A small shareholder is someone who holds equity shares having a market value of not more than Rs 2 lakh, as on the record date. There are 25,85,684 small shareholders of Infosys.
The date for the purpose of determining the entitlement and eligible shareholders was set at November 14.
The ratio of buyback from the reserved category is set at 2:11, that is, 2 equity shares for every 11 equity shares held. For the general category, the ratio is 17:706.
Entitlement is the number of equity shares that an eligible shareholder is entitled to tender in the buyback, against the number of equity shares held by them on the record date.
Why could share buyback benefit retail investors?
In an exchange filing released on October 22, Infosys announced that its promoters and the promoter group have declared their intention to not participate in the buyback.
As on September 30, 2025, promoters and promoter group of the company held 14.30 percent stake in the company, while 85.46 percent was held by public. Among the individual promoters, Infosys Co-founder Nandan Nilekani held 1.08 percent shares of the company.
NR Narayana Murthy and Sudha Murthy owned 0.40 percent and 0.91 percent stake respectively, while their children Rohan Murthy and Akshata Murthy held 1.60 percent and 1.03 percent stake in the company respectively.
"Since promoters are not participating, the acceptance ratio for public shareholders particularly retail should be relatively high, improving the effective realized upside," said Abhinav Tiwari, Research Analyst at Bonanza.
"The promoters' decision to opt out of the buyback signals confidence in future prospects and improves the entitlement ratio for retail investors," Saurabh Jain, assistant vice president of retail equities at SMC Global told Reuters.
Promoters not cashing out signals confidence in the business prospects, and adding to the overall investor bullishness in IT sector, Anita Gandhi, founder and head of institutional business at Arihant Capital Markets told Reuters.
Tax considerations:
Ajit Mishra, Senior Vice President – Research, Religare Broking, said investors’ decision to tender would largely depend on tax considerations. "Since October 2024, buyback proceeds are taxed as dividend in shareholders’ hands, making the offer less attractive for those in higher tax brackets. For low-tax or tax-exempt investors, tendering could provide gains if the acceptance ratio, particularly under the small shareholder quota, is favourable," he noted.
"A critical factor is Infosys’ balance sheet strength. The company is funding the buyback entirely through internal cash and reserves, underscoring its strong free cash flow generation...However, the key consideration post Budget 2024 is taxation. Buybacks are now taxed as 'deemed dividend', meaning the payout is fully taxable at the shareholder’s slab rate. For investors in the 30%+ surcharge bracket, the net benefit from the premium sharply reduces, often making a market sale near the buyback price more efficient. For lower tax bracket investors, the tender route still delivers clear incremental value," Abhinav Tiwari from Bonanza said.
"From a fundamental standpoint, Infosys is in a transition phase. Deal wins and revenue visibility remain healthy but not high growth, margins have stabilized but are not expanding meaningfully, and sectoral demand remains cyclical. The buyback partially offsets slower EPS growth by reducing share count and improving ROE which is supportive for long term holders who do not tender," he concluded.
What is a share buyback?
Buyback refers to a corporate action where a company repurchases its own shares from the existing shareholders. Infosys' buyback price of Rs 1,800 apiece marked a premium of more than 19 percent from the levels seen by the stock on the day it was announced in September.
The company aims to buy back 10 crore fully paid-up equity shares of a face value of Rs 5 each, representing up to 2.41 per cent of the total paid-up equity share capital.
"The Buyback is being undertaken by the company after taking into account the strategic and operational cash needs of the company in the medium term and for returning surplus funds to the shareholders in an effective and efficient manner in line with its capital allocation policy," Infosys said.