The Rs 18,000-crore share buyback by Infosys may prompt other IT majors such as Tata Consultancy Services (TCS) and Wipro to undertake similar exercises, analysts said. CLSA has said TCS may consider a tender-style buyback of around Rs 20, 000 crore in the coming quarters instead of opting for a large special dividend, pointing to a broader trend of firms using cash returns to shore up shareholder sentiment. If it happens, it would be the largest buyback ever. At Rs 18,000 crore, Infosys’ impending buyback, and TCS’ buyback for the same amount in 2023, is already the highest by India Inc.
The buyback announcement has also given Infosys’ stock some buoyancy. On Friday, the day after the buyback details were announced, its shares closed at Rs 1, 525.55, up 1.6% compared with the previous close and 5.6% week-to-date.On a year-to-date basis however, the stock is still trading nearly 19% lower. The broader BSE IT index has mirrored this pattern, rising 4.2% in the week but remaining down 17.9% in 2025 so far.
Why IT firms are turning to buybacks
Analysts note that with sector valuations under pressure and earnings growth muted, buybacks are emerging as a preferred tool to provide near-term support to stock prices. Nomura analysts said Infosys’ decision “will help support the stock price in light of a weak Q2 and a softer second half”, even as the company has guided for just 1-3% revenue growth in constant currency terms this year. The subdued outlook reflects the strain on discretionary spending by global clients, with demand recovery still uncertain.
Strategy to combat global and regulatory challenges
The IT sector has been challenged by multiple macroeconomic developments which continue to put margins under pressure. While already struggling with delays in decision making and deal ramp-ups on the clients’ end, the IT sector was served a double whammy in the form of the global tariff tussle that continues to play out, and the further tightening of client budgets shifting focus to cost-optimisation over transformation.
The latest challenge comes in the form of the proposed Halting International Relocation of Employment (HIRE) Bill, which seeks to levy a 25% tax on American companies that outsource work to foreign entities. While still in the deliberation stage, the proposal is expected to further put a spanner in the works, as taxation uncertainty mounts for US-based clients, and budgetary constraints bloat. The Infosys board approved the buyback on September 11, fixing the price at Rs 1,800 per share, a 19% premium to its pre-announcement level.
The company will repurchase up to 100 million fully paid-up equity shares of face value Rs 5 each, representing 2.41% of the paid-up share capital. The exercise will be conducted through the tender offer route, with eligibility determined on a record date yet to be announced. Holders of American depositary shares can also convert their holdings into equity and participate. The Rs 18,000-crore size excludes expenses such as brokerage, taxes and regulatory fees, and the proposal is subject to shareholder approval via postal ballot.
Infosys’ announcement comes against the backdrop of peers having already tapped this route in recent years. Wipro launched a Rs 12,000-crore buyback in 2023, HCLTech completed one earlier, and TCS concluded a Rs 17,000-crore buyback in December 2023.