Infosys Ltd said it will spend ₹18,000 crore to repurchase shares from the market, marking the biggest buyback yet by India’s second-largest IT services company.
The company will buy back 100 million shares at ₹1,800 each, 19.2% above their Thursday closing of ₹1509.50. Earlier, Infosys spent ₹13,000 crore in its first buyback in 2017, followed by ₹8260 crore in 2019, ₹9200 crore in 2021 and ₹9300 crore in 2022.
The buyback continues a tradition of IT services companies returning excess back to shareholders. TCS and Wipro have both engaged in three buybacks each over the last five years. TCS has a stated policy of returning 80-100% of free cash flow to shareholders, whereas HCLTech has a target of returning a minimum of 75% of net income to shareholders.
With this, Infosys also matches the biggest buyback by an IT firm, announced by Tata Consultancy Services in 2022, when it sought to repurchase ₹18,000 crore worth of shares. While TCS then sought to buy back 1.08% of its shares, Infosys is now repurchasing up to 2.41%.
“The above (Infosys) buyback is higher than our expectation of ₹12,000-18,000 crore,” said Amit Chandra, vice-president of HDFC Securities. Similarly, Kotak Institutional Securities expected the buyback size to be lower, estimating a buyback of ₹13,560 crore, as stated on its website.
According to Kotak, the buyback signals undervaluation. “The Infosys stock fell 24% year-to-date in 2025, prompting the management to act,” the broking firm said in a note on Wednesday.
Promoters owned 14.61% of Infosys at the end of June 2025. Foreign Institutional Investors (FIIs) held 31.92%, compared to 32.89% in March 2025, which, according to Kotak analysts, indicated “cautious sentiment”. Domestic Institutional Investors (DIIs) owned 39.6%, while mutual funds owned the remaining fifth of shares in the company.
The buyback is in line with Infosys’s stated policy of returning cash to shareholders.
“Effective from financial year 2025, the company expects to continue its policy of returning approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback/ special dividends, subject to applicable laws and requisite approvals, if any,” the company’s capital allocation policy reads.
Last year, Infosys ended with $4.1 billion in free cash flow; if it reported a similar cash flow till FY30, it would translate to about $17.4 billion being handed out to shareholders in the coming five years.
The Infosys buyback comes at a time when investors have been lukewarm to IT. Each of the top five IT outsourcers reported a decline in share price since the start of the year. TCS, Infosys, HCLTech, Wipro, and Tech Mahindra have seen their shares fall 23.75%, 19.74%, 23.48%, 15.91%, and 10.84%, respectively.
An IT industry analyst said other IT outsourcers too might engage in buybacks.
“The macroeconomic condition is not very stable and demand is low. In such times, it will be tough for companies to invest in new technologies because demand itself is low and they are getting less work,” said a Mumbai-based analyst on condition of anonymity.
Growth has been slowing for IT’s Big Five over the last couple of years. TCS, Infosys, and HCL Technologies Ltd grew 3.78%, 3.85%, and 4.3% on a yearly basis, respectively. In contrast, Wipro Ltd and Tech Mahindra Ltd reported a revenue decline of 2.72% and 0.21%, respectively.
Still, Infosys is cautiously optimistic on the future. The Bengaluru-based IT services company raised the lower end of its FY26 guidance to 1-3% in constant currency terms in July, higher than the flat to 3% growth it had projected in April, which was its slowest revenue guidance in at least a decade. Constant currency does not take currency fluctuation into account.
“Despite margin compression, the company maintains robust liquidity and consistent deal wins,” said the Kotak note.
