Infosys shares rise 3% as Rs 18,000-crore share buyback window opens on Thursday; Nifty IT index up 2.8%

Infosys shares rise 3.5% as Rs 18,000-crore share buyback window opens on Thursday: Here's why

Shares of IT major Infosys Ltd rose 3.5% on November 19 a day after the firm said the window for Rs 18,000-crore share buyback will open on November 20.

At 1:10 pm on November 19, Infosys stock was trading 3% higher at Rs 1,533.5 and was among top gainers on the benchmark Nifty 50 index, which is trading 0.1% higher.

Consequently, the Nifty IT index rose 2.8% to trade at 37,001, thus emerging as the biggest sectoral gainer on benchmarks on November 19. Persistent Systems, HCLTech, LTI Mindtree also led the gains on the index by rising 4-4.5%.

On November 18, country's second-largest software services exporter said it will open its buyback window on November 20, 2025 for shares worth Rs 18,000 crore.

The company had set per share price for buyback at Rs 1,800, which is at a 21% premium to November 18 close.

The company's promoters, who hold 13.05% stake as of September 30, had decided to opt out of the share buyback

In September, the company's board had approved the fifth share buyback in its history.

So far in 2025, the stock fell 18.5%.

Analysts on Infy share buyback

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.

"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.

The share buyback signals disciplined capital management and a consistent intent to return surplus funds to shareholders, said an analyst.

"Since promoters are not participating, the acceptance ratio for public shareholders particularly retail should be relatively high, improving the effective realized upside. 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. Importantly, Infosys’ FY25 capital allocation framework commits to returning 85% of cumulative free cash flows over five years via dividends and buybacks. This signals disciplined capital management and a consistent intent to return surplus funds to shareholders, supporting long term value creation even in a low growth environment.

"From a fundamental standpoint, Infosys is in a transition phase, deal wins and revenue visibility remain healthy but not high growth, margins have stabilised 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," said Abhinav Tiwari, Research Analyst at Bonanza.

All about mega Infy share buyback

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, at Rs 1,800 per share.

"The eligible shareholders can tender their equity shares during the tendering period, i.e. from November 20, 2025, to November 26, 2025.

"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.

The buyback is divided into two categories: reserved (small shareholders) and the general category. The reservation for small shareholders will be 15 per cent 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 2,00,000, as on the record date. There are 25,85,684 small shareholders of Infosys.

The date for the purpose of determining the entitlement and the names of the eligible shareholders shall be November 14, 2025.