Infosys has announced one of its largest capital-return initiatives to date, unveiling a share buy-back programme amounting to Rs 18,000 crore through the tender offer route. Under this plan, the company intends to repurchase up to 10 crore fully paid-up equity shares, representing about 2.41% of its paid-up equity capital, at a price of Rs 1,800 per share.
The board of Infosys approved this buy-back in a meeting held on 11 September 2025. The company filed the draft letter of offer (DLOF) with the regulatory authorities including the Securities and Exchange Board of India (SEBI) and the US SEC as part of the procedural steps to launch the offer.
One of the most noteworthy aspects of the buy-back is the decision of the promoters and promoter group to not participate in the offer. Key figures within the promoter group including N. R. Narayana Murthy’s family, Nandan M. Nilekani and Sudha Murty have formally stated they will abstain from tendering their shares under this scheme. As of the announcement date, the promoter and promoter group collectively held approximately 13.05% of the equity of the company.
The promoters’ decision to stay out is being interpreted by market participants as a strong signal of their confidence in the company’s future prospects. Because they will not tender their shares, the entitlement ratio (i.e., the ratio of shares accepted to shares offered) potentially improves for the non-promoter investors, providing a relatively better opportunity for participation by retail and public shareholders. Market reaction to the announcement has been positive: Infosys shares rose by around 4% following the buy-back disclosure, suggesting that investors welcomed this move to return cash and optimize capital allocation.
From a strategic perspective, Infosys stated that the buy-back aligns with its broader capital allocation policy. The company expects to return approximately 85% of its free cash flow over a five-year period to shareholders via a combination of dividends and buy-backs, subject to applicable laws and approvals. According to filings, the funding for this buy-back will come from internal accruals and free reserves, ensuring that the company’s operational and strategic cash needs remain unaffected.
As part of the technicalities: The face value of each equity share is Rs 5, and the buy-back will be conducted via tender offer. The next steps include announcing a record date for eligibility, launching the tender period and extinguishing the repurchased shares once the process completes. There are also fiscal and regulatory cross-winds. A recent tax rule tweak for share buy-backs may favour retail investors and mutual funds, as the tax treatment shifts, potentially improving the attractiveness of participating in the buy-back.