Infosys Share Buyback: A Quick Guide for Investors

If you own Infosys shares or are thinking about buying, the recent buyback announcement is worth a close look. A share buyback means the company will repurchase its own stock from the market, reducing the total number of shares floating. This often boosts earnings per share and can lift the stock price, but it also ties up cash that could be used elsewhere. Let’s break down the basics so you know what to expect.

Why Infosys Is Buying Back Shares

Infosys says the buyback is aimed at returning excess cash to shareholders and improving capital efficiency. After a strong earnings season, the board decided the best use of surplus cash was to buy shares at the current market price. This signals confidence in the company's future and can create a price floor, reassuring investors who might worry about dilution from future issuances.

How the Buyback Works: Timeline and Eligibility

The process usually runs in three phases: announcement, open offer, and closure. Once the announcement is made, Infosys will open an offer window—typically 10‑15 business days—during which eligible shareholders can tender their shares. Eligibility often requires a minimum holding, like 100 shares, and the offer is open to both retail and institutional investors. After the tender period, the company allocates the shares, pays the offer price (usually a slight premium over the current market rate), and cancels the bought‑back shares.

Key dates matter. Mark your calendar for the start of the tender period, the last day to submit shares, and the settlement date when funds are transferred. Missing any of these windows means you’ll have to wait for the next buyback cycle.

Impact on Your Investment

When Infosys buys back shares, the remaining stock represents a larger slice of the company’s earnings. This can translate into a higher earnings‑per‑share (EPS) figure, often nudging the share price upward. However, buybacks don’t guarantee a price jump; market sentiment and broader economic factors still play a role.

For long‑term holders, a buyback can be a nice little bonus—your share of the pie gets bigger without you having to do anything. If you’re a short‑term trader, keep an eye on the price movement around the tender dates; volatility tends to increase as investors react to the news.

Tax and Practical Tips

In India, any profit from the buyback is treated like a dividend for tax purposes, so you’ll owe taxes on the amount received at your applicable slab rate. It’s a good idea to consult a tax advisor to understand the exact impact on your return.

Before tendering, compare the offer price with the current market price and consider your investment horizon. If the premium is attractive and you don’t need the cash immediately, participating can be a smart move. Otherwise, you might hold onto your shares for potential future growth.

Finally, use your broker’s platform to check the tender status and confirm your participation. Most brokers send notifications when the offer opens and close, so stay alert and avoid missing out.

In a nutshell, Infosys’s share buyback is a chance to get a tidy cash payment while potentially boosting the value of the shares you keep. Keep an eye on the timeline, understand the tax hit, and decide based on your financial goals. Happy investing!