Infosys' promoters not to participate in Rs 18,000-crore share buyback. Why is it good news for retail investors?

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26 Aug, 2025 12:21

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The shares of Infosys jumped nearly 5 percent on October 23 after promoters and promoter group, including Nandan M Nilekani and Sudha Murty, decided not to participate in the company's Rs 18,000 crore share buyback.

The shares of the company were trading at Rs 1,543.90 apiece on Thursday, emerging as the top gainer on the Nifty IT index, as well as benchmark indices Sensex and Nifty.

Infosys on September 11 announced that its board has approved a share buyback proposal worth Rs 18,000 crore, its largest ever. 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.

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.

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.

Infosys Co-founder Kris Gopalakrishnan owned 0.84 percent stake, while his wife Sudha Gopalakrishnan owned 2.52 percent stake in the company. Notably, Sudha Gopalakrishnan held the biggest stake in the company among all the promoters.

"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.

Infosys shares jumped more than 6 percent in the past five days, and over 3 percent in the past one month. The stock is however down more than 18 percent in 2025 so far. Its P/E ratio currently stands at around 22.23.

Infosys on October 16 reported a net profit of Rs 7,364 crore for Q2 FY26. This marks a 13.2 percent YoY rise from the Rs 6,506 crore net profit reported in Q2 FY25. The firm's revenue from operations meanwhile grew 8.5 percent to Rs 44,490 crore. Its expenses rose to Rs 35,243 crore.

Infosys announced an interim dividend of Rs 23 per equity share. The company has set October 27 as the record date to determine the eligibility of shareholders set to receive the payment.

Operating margin stood at 21% during the quarter. Free cash flow generation was strong at $1.1 billion, 131.1 percent of net profit. TCV of large deal wins was $3.1 billion, with net new of 67 percent. Employee headcount increased by 8,203.

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