Infosys gains on biggest-ever buyback plan; Mcap up ₹40,000-cr in 5 days

Infosys will repurchase 100 million shares at an average price of ₹1,800 per share, a 19.3 per cent premium to its Thursday closing share price

Shares of Infosys rose over 2 per cent on Friday after the information technology (IT) major announced its fifth share buyback worth ₹18,000 crore, the biggest ever. 

 

The IT bellwether stock rose as much as 2.20 per cent during the day to ₹1,542.9 per share, the biggest intraday rise since September 9 this year. The Infosys stock pared gains to trade 1.34 per cent higher at ₹1,529.9 apiece, compared to a 0.26 per cent advance in Nifty 50 as of 10:06 AM. The company saw its market capitalisation rise by about ₹40,000 crore since it announced that it would consider a buyback proposal on September 8. 

 

Shares of the company rose to the highest level since July 25 and currently trade at 4.5 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 18 per cent this year, compared to a 6 per cent advance in the benchmark Nifty 50. Infosys has a total market capitalisation of ₹6.35 trillion.  READ STOCK MARKET LIVE UPDATES TODAY

Infosys share buyback plan

The IT major will buy back shares worth ₹18,000 crore at a time when IT stocks have been under pressure due to a weak macroeconomic environment and tariff-related uncertainties. The Bengaluru-based company will repurchase 100 million shares at an average price of ₹1,800 per share, a 19.3 per cent premium to its closing share price of ₹1,509.50 on Thursday.

 

This represents 2.41 per cent of the total number of equity shares in the company’s paid-up equity capital, the country’s second-largest IT services provider said.

 

The company utilised ₹13,000 crore for its buyback back in 2017, via tender offer, repurchasing 113 million shares at an average price of ₹1,150 per share. In 2019, Infosys spent ₹8,260 crore to purchase 110.5 million shares for ₹747 per share in the open market. Similarly, in 2021 and 2022, the tech giant bought shares worth ₹9,200 crore (55.8 million shares) and ₹9,300 crore (60.4 million shares), respectively.  ALSO READ | After Infosys, TCS, Wipro may follow with buyback amid stock rout: Analysts

Nomura on Infosys buyback

With the announced buyback and the expected dividend of ₹55 per share, analysts at Nomura estimate Infosys will return more than 100 per cent of its free cash flow for the financial year 2026 to shareholders. "We expect the buyback to be largely earnings per share neutral in the FY26."

 

Infosys remains one of the top picks in the large-cap Indian information technology space, Nomura said. It retained a 'Buy' rating and a target price of ₹1,880, set at 25 times FY27 earnings per share (EPS). "We expect Infosys to post 3.8 per cent year-on-year US dollar revenue growth in FY26, including about 40 basis points from acquisitions (excluding the recently announced Versent deal)."

 

Infosys and Cognizant are the top picks in the large-cap Indian information technology space, Nomura said.