Infosys, one of India’s leading IT giants, has announced a substantial ₹18,000 crore share buyback. It is the fifth buyback since listing, a move that highlights management’s confidence in the company’s long-term growth prospects.

However, shares of Infosys have experienced a significant decline over the past year, falling more than 21% to ₹1,528 as of 12 September 2025, from ₹1,950 a year earlier.

The stock has been on a downward trend, reaching a 52-week low of ₹1,307 compared to a high of ₹2,006. With a market capitalisation of ₹6.34 lakh crore, a P/E ratio of 23.28, and a dividend yield of 2.81%.

The company intends to repurchase up to 10 crore equity shares, accounting for 2.41% of its total paid-up capital. The buyback price has been set at ₹1,800 per share, representing a premium of nearly 18% over the current market price of approximately ₹1,529. The record date to determine eligibility has not yet been announced, allowing investors time to prepare.

"A share buyback at a premium is one of the clearest ways for management to communicate its confidence in the future. Despite a challenging year that saw Infosys’ stock decline nearly 20%, the company’s strong cash position allows it to reward shareholders while signalling that it sees current valuations as attractive," said Hariprasad K, SEBI-registered Research Analyst and Founder of Livelong Wealth.

Experts say that Infosys has faced challenges in the past year due to declining discretionary technology spending, regulatory uncertainty in the US, and the sector-wide shift towards AI-led solutions. These factors have affected sentiment, keeping the stock under pressure.

However, despite short-term challenges, Infosys continues to demonstrate strong fundamentals. For instance, a healthy order pipeline, consistent cash flows, and global credibility as a trusted IT partner. “The buyback reflects management’s view that these strengths will lead to sustained growth as technology spending recovers and AI adoption creates new opportunities,” said Hariprasad K.

Investor takeaway

Investors should realise that even if the stock price drops, they can take reassurance in knowing the company has set the value at ₹1,800. For those wishing to sell, the buyback offers a chance to sell at a price above what the market currently offers.

“For long-term investors, the buyback could serve as a psychological floor for the stock, with the ₹1,800 price acting as a key reference point. At the same time, it gives shareholders the option to tender their holdings at an attractive premium if they wish to book profits,” said Hariprasad K.