Infosys Share Buyback 2025 Explained: Should Investors Tender or Hold?

Infosys announces a record ₹18,000 crore share buyback at ₹1,800 per share. What it means for investors, IT sector, and Infosys’s future.

Imagine you’re watching a cricket match. Your favorite team is struggling at the crease. Instead of reworking their strategy, the captain suddenly waves to the crowd and gives away free T-shirts. The cheers go up, but has the game really improved?

That’s exactly how many investors are viewing Infosys’s ₹18,000 crore share buyback in 2025. On September 11, Infosys announced its largest-ever buyback, offering shareholders ₹1,800 per share — a nearly 19% premium over its last closing price of ₹1,509.

For investors, the news felt like a festival bonus. But for analysts, it raised eyebrows. Why is Infosys, India’s second-largest IT services giant, choosing to return such a massive amount to shareholders at a time when its growth has slowed, its sector is under pressure, and global uncertainties loom large?

Let’s dive deep into what this buyback means — not just for Infosys investors, but also for the future of India’s IT services industry.

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What Is a Share Buyback and Why Do Companies Do It?

At its core, a share buyback is like a company buying back its own invitation to the party. Instead of inviting more people (issuing shares), it reduces the crowd (repurchasing shares).

Tender Route: The Only Way Left

Earlier, companies could buy back shares in two ways:

• Open market: Buying shares directly from the stock exchange.
• Tender offer: Shareholders voluntarily sell their shares to the company within a set timeframe.

But SEBI, India’s market regulator, has phased out the open market route. So Infosys is going through the tender offer method, where investors can tender their shares at the fixed buyback price of ₹1,800.

Why Companies Love Buybacks

• Boosts earnings per share (EPS) by reducing the number of outstanding shares.
• Sends a signal of confidence in future cash flows.
• Provides tax-efficient rewards to shareholders compared to dividends.

What You Should Remember

A buyback is like a quick sugar rush — it can lift short-term energy but doesn’t replace a balanced meal. Companies often use it to signal strength or appease investors during tough times.

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Infosys’s Buyback 2025: The Big Picture

Infosys’s ₹18,000 crore buyback represents:

• 100 million shares at ₹1,800 apiece.
• 2.41% of total equity — comfortably under SEBI’s 25% cap.
• The first buyback since 2022, when it spent ₹9,300 crore.

Premium Over Market Price

The ₹1,800 offer price is 19% higher than the stock’s September 11 closing price. Not surprisingly, the stock spiked over 2% intraday after the news.

Global Regulatory Hurdle

Since Infosys is also listed in the US, it sought exemptive relief from the SEC due to conflicting tender offer regulations between India and the US.

Cash Cushion

The company isn’t short of money. With ₹42,000+ crore in cash and equivalents and ₹20,000 crore free cash flow in FY25, Infosys can afford this payout. It also follows its capital allocation policy — returning 85% of free cash flow to shareholders over five years via dividends and buybacks.

What You Should Remember

Infosys has the wallet for this move. But whether it’s the best use of cash during a slowdown is a more complex question.

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Why Now? The Timing Behind Infosys’s Move

Timing is everything in both cricket and investing. Infosys’s decision comes at a tricky moment:

• Sluggish growth: Revenue grew just 1% in H1 2025.
• Deal slowdown: FY25 deal wins dropped to $11.6 billion, from $17.7 billion in FY24.
• Stock under pressure: Down 18% in 2025 so far, underperforming the Nifty IT index.
• Tough global climate: US firms (56% of Infosys revenue) are cutting IT spends amid policy and economic uncertainty. Europe (30% of revenue) is also struggling.

So why a buyback now? Analysts point to two possibilities:

1. Short-term sentiment booster: Keep investors engaged while growth slows.
2. Confidence signal: Show the market that Infosys is financially healthy despite sector headwinds.

What You Should Remember

Infosys’s buyback looks less like a celebration of strong growth, and more like a strategic band-aid for uncertain times.

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The Bigger Question: Short-Term Cheer or Long-Term Gamble?

Let’s be blunt: Infosys isn’t exactly on a growth spree right now. The IT sector’s glory days of double-digit growth are behind it, at least for now.

• Mid-tier IT firms like Coforge and Persistent are clocking better growth, even if margins are thinner.
• Large-caps like Infosys and TCS are struggling with shorter, smaller contracts and AI-driven pricing pressure.
• With less than 1% of revenue spent on R&D, Indian IT giants are far behind global peers like Accenture in future-focused investment.

Short-Term Gains from Buybacks

• EPS and ROE look better.
• Stock gets an immediate floor price.
• Investors feel reassured.

Long-Term Risks

• Money returned to shareholders is money not spent on R&D, AI innovation, or restructuring.
• Signals Infosys is playing defensive rather than offensive.
• Could delay much-needed organisational changes.

What You Should Remember

A buyback is like painting over cracks in the wall. The house looks fresh, but unless the foundation is repaired, problems resurface later.

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How Analysts Are Reading the Buyback

Brokerages are split — though mostly leaning positive in the near term.

• CLSA: Outperform, target ₹1,861 (23% upside). Believes buyback will support stock in weak H2 FY26.
• Nomura: Buy, target ₹1,880 (24% upside). Forecasts 3.8% CC revenue growth in FY26.
• Investor Sentiment: Stock is undervalued at 20x forward earnings, below the sector’s PE ratio and its own 5-year average of 25.

What You Should Remember

Analysts see upside, but also caution that Infosys must fix growth levers, not just stock sentiment.

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Lessons for Investors: Should You Tender Your Shares?

If you’re holding Infosys stock, the buyback poses an important question: should you sell or hold?

Pros of Tendering

• 19% premium over market price.
• Guaranteed payout if accepted.

Cons of Tendering

• Infosys stock may rise further if growth stabilizes.
• Long-term investors may miss out on recovery.

Practical Approach

• Retail investors (holding under ₹2 lakh worth of shares) often get higher acceptance in buybacks due to reserved quotas.
• If you believe Infosys has stronger long-term potential, tender only part of your holdings.

What You Should Remember

Buybacks offer a sweet exit price — but think about your long-term conviction before selling everything.

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Where Does Infosys Go From Here?

Looking ahead, Infosys needs to do more than distribute cash:

1. Upskilling Workforce: Moving beyond just “AI-ready workforce” slides and focusing on outcome-based metrics like Accenture.
2. Investing in Innovation: Allocating more than 1% of revenue towards R&D.
3. Restructuring Teams: Cutting bureaucracy and adopting leaner, project-based models.
4. Global Expansion: Leveraging inorganic growth like the Versent acquisition to open new markets.

What You Should Remember

Infosys’s future success won’t be decided by this buyback, but by how it adapts to AI, global uncertainty, and mid-cap competition.

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📣 Conclusion

Infosys’s ₹18,000 crore share buyback is a bold move that offers shareholders quick value. But it also sparks a bigger debate:

👉 Should India’s IT majors prioritize rewarding investors or reinvesting in innovation?

Infosys may have scored a short-term six, but the real test lies in the next innings — whether it can reinvent itself for the AI-first, uncertainty-heavy future.

What do you think: Should Infosys have reinvested in growth instead of buying back shares? Share your thoughts in the comments.