On Tuesday as of 10:40 am IST, the benchmark Sensex was up 0.23% at 80,976, while the Nifty 50 index also advanced 0.23% to 24,830, as rising expectations of a US interest rate cut this month lifted investor sentiment for risk assets globally.
Meanwhile, IT major Infosys has announced that its board will consider a major share buyback proposal at its September 11, 2025, meeting, sparking renewed interest among investors and leading to a surge in its share price on Tuesday.
Infosys, India’s second-largest IT services company, revealed via exchange filings that a board meeting on September 11 will discuss repurchasing fully paid-up equity shares. This marks Infosys’ fifth proposed buyback since 2017. It's the first such action when the stock is down almost 25% in the past year.
The previous buyback, in December 2022, involved repurchasing over 50 million shares for ₹9,399 crore at a maximum price of ₹1,850 per share, through the open market. Infosys undertook similar buybacks in 2021 (₹9,279 crore), 2019 (₹8,523 crore), and 2017 (₹13,000 crore). Buybacks have consistently featured in Infosys’ capital allocation, aiming to return 85 per cent of free cash flows via dividends, buybacks, and special payouts.
A buyback, or share repurchase, is a corporate action where a company buys its own outstanding shares from the open market or through a tender offer. A buyback reduces the number of shares, which increases earnings per share (EPS). Companies use buybacks to return extra cash to investors, often at a price higher than the market rate. It also shows that management believes the stock is undervalued.
Despite sector-wide headwinds, Infosys posted a 8.7% year-on-year net profit growth in Q1 FY26 (₹6,921 crore), with revenues up 7.5% at ₹42,279 crore. The company secured $3.8 billion in new deals and raised its lower revenue guidance for FY26 to 1–3% in constant currency terms. However, margins slipped slightly, and the IT sector overall underperformed, adding context for the buyback as a tool to signal stability and reward long-term investors.
Details about the buyback’s size, pricing, and timeline will only be finalised after the September 11 board meeting.
Infosys’ share price jumped nearly 4.47% after the announcement, as of 11:02 am IST the stock price was trading at approximately ₹1,497.50 on the NSE, outperforming both the Sensex and Nifty IT indices. This move reflects renewed investor optimism, with buybacks often signalling management confidence and a route to enhance shareholder returns by reducing share count and supporting earnings per share.
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