The biggest buyback in Infosys' history offers regular investors a chance to profit from arbitrage. Infosys's long-term prospects are still favorable.
Infosys buyback: Later this week is the record date for IT bellwether Infosys' ₹18,000 crore buyback, giving investors a final opportunity to take part in the massive deal.Friday, November 14 is Infosys' buyback record date. This means that the repurchase is only available to shareholders who own Infosys stock on or before November 14, 2025. Investors must buy Infosys shares before November 13 due to the T+1 settlement system.
Details of Infosys' buyback
Infosys has set the buyback price at ₹1,800 per share, which is more than 18% higher than the most recent closing price of ₹1,514.60 on the BSE on Monday. The buyback is being carried out through the tender offer procedure.
Up to 10 crore equity shares, or 2.41% of the company's paid-up equity share capital, would be repurchased by Infosys. All shareholders are eligible for the repurchase offer, with 15% set aside for small investors.
Infosys has set the buyback price at ₹1,800 per share, which is more than 18% higher than the most recent closing price of ₹1,514.60 on the BSE on Monday. The buyback is being carried out through the tender offer procedure.
Up to 10 crore equity shares, or 2.41% of the company's paid-up equity share capital, would be repurchased by Infosys. All shareholders are eligible for the repurchase offer, with 15% set aside for small investors.
Within two working days of the Letter of Offer being sent, eligible shareholders will have five working days to offer their shares. According to the company's announcement, Infosys will deliver the tender form and the Letter of Offer within two working days of the record date.
This most recent buyback announcement is the biggest in the company's history and comes after a three-year hiatus. The move coincides with pressure on Infosys' stock, which has dropped almost 25% from its recent highs due to challenges in the IT industry.
Infosys has stated that its promoters, which include Sudha Murthy and Nandan M. Nilekani, will not take part in the company's biggest buyback to date.
This most recent buyback announcement is the biggest in the company's history and comes after a three-year hiatus. The move coincides with pressure on Infosys' stock, which has dropped almost 25% from its recent highs due to challenges in the IT industry.
Infosys has stated that its promoters, which include Sudha Murthy and Nandan M. Nilekani, will not take part in the company's biggest buyback to date.
Should ordinary investors take part in the buyback of Infosys?
Even though the promoters have chosen not to submit their shares in the repurchase, it is still unclear whether this is a profitable prospect for individual investors.
The buyback of Infosys, according to analysts, presents ordinary investors with an instant arbitrage opportunity, but the option to participate is now complicated by major tax implications.
Since October 2024, the buyback's entire proceeds have been subject to taxation as a "deemed dividend" at the shareholder's individual income tax slab rate (up to 30% plus surcharge and cess). This is a significant change from the previous system, in which investors were excused from paying taxes on such proceeds.
Even though the promoters have chosen not to submit their shares in the repurchase, it is still unclear whether this is a profitable prospect for individual investors.
The buyback of Infosys, according to analysts, presents ordinary investors with an instant arbitrage opportunity, but the option to participate is now complicated by major tax implications.
Since October 2024, the buyback's entire proceeds have been subject to taxation as a "deemed dividend" at the shareholder's individual income tax slab rate (up to 30% plus surcharge and cess). This is a significant change from the previous system, in which investors were excused from paying taxes on such proceeds.
Santosh Meena, Head of Research at Swastika Investmart, stated that compared to selling the shares on the open market and paying the standard 10% Long-Term Capital Gains (LTCG) tax only on the profit component, the post-tax gain from the buyback may be less appealing or even result in a loss for high-income earners in the top tax bracket. "Therefore, tax efficiency must override the premium appeal for higher-slab investors."
According to the analyst, the calculation favors small owners who own shares valued at up to ₹2 lakh because of the high probability of acceptance.
According to the analyst, the calculation favors small owners who own shares valued at up to ₹2 lakh because of the high probability of acceptance.
"SEBI mandates a 15% reservation for this category, historically leading to acceptance ratios that far exceed the general category. This advantage is amplified by the fact that Infosys promoters, including co-founders Narayana Murthy and Nandan Nilekani, have stated they will not participate in the buyback, effectively increasing the pool of shares available for other investors. This scenario creates a strong short-term opportunity to sell a portion of one's holding at a guaranteed premium of more than 15% over the recent market price," stated Meena.
Investors should keep in mind that previous buybacks have only received partial acceptance, leaving the remaining portion vulnerable to market volatility once the tender window ends, even if the acceptance ratio for retail investors is generally greater than for institutional categories.
Investors should keep in mind that previous buybacks have only received partial acceptance, leaving the remaining portion vulnerable to market volatility once the tender window ends, even if the acceptance ratio for retail investors is generally greater than for institutional categories.
Vinod Nair, Head of Research at Geojit Investments, now sees little chance "given the low acceptance ratio with a high retail investor base of more than 28 crore shares" for investors hoping to purchase Infosys shares before the buyback record deadline for profits.
With an improving large-deal pipeline and lower attrition, Harshal Dasani, Business Head, INVAsset PMS, thinks Infosys is headed toward recovery.
"For investors with a long-term view, holding may yield better compounding benefits; for short-term investors seeking low-risk gains, partial participation makes sense," he said.
With an improving large-deal pipeline and lower attrition, Harshal Dasani, Business Head, INVAsset PMS, thinks Infosys is headed toward recovery.
"For investors with a long-term view, holding may yield better compounding benefits; for short-term investors seeking low-risk gains, partial participation makes sense," he said.
Outlook for Infosys stock
All things considered, the future of the IT industry is still questionable due to tighter client budgets, especially in the US and Europe, and the state of the world economy. As a result, these companies' near-term growth projections have been tempered.
Long-term prospects, however, are favorable due to continued cloud usage, AI integration, and digital transformation. Despite a muted business climate, Infosys stands out with 2.9% YoY CC growth, according to Nair. He continued, "The stock seems appealing to long-term investors with valuations around historical averages."
All things considered, the future of the IT industry is still questionable due to tighter client budgets, especially in the US and Europe, and the state of the world economy. As a result, these companies' near-term growth projections have been tempered.
Long-term prospects, however, are favorable due to continued cloud usage, AI integration, and digital transformation. Despite a muted business climate, Infosys stands out with 2.9% YoY CC growth, according to Nair. He continued, "The stock seems appealing to long-term investors with valuations around historical averages."
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