Infosys announces its largest stock buyback on 19% premium announcement of 18,000 crores

Leading IT Service Player Infosys Limited on Thursday announced a buyback of Rs 18,000 crore by tender route, the largest after the list. Bengaluru -based IT Major will buy around 10 million shares, which will introduce 2.41% of the equity to Rs 1,800, which will be 19% premium above the current market price.

Under the Tender Offer Fur under buyback, the company generally fails to re -purchase a certain number of shares at a fixed price, which is higher than the current market price. This offer fur is open for a limited period, and shareholders can offer their shares to the company.

Pre-set buyback provides investors a certainty about the value available for their share. If the number of tendered shares is higher than what the company wants to buy back, the stock is accepted on a proportional basis.

This is the fifth buyback for Bengaluru-based IT Major, which is fighting for reduced costs from consumers and disruption of AI-leadership in its business. Previously, the company had paid Rs. 13000 crore, Rs. 8,260 crore, 9,200 crore in 2021 and around Rs 9,300 crore in 2023.

This current buyback signals the confidence of management on the company’s long -term cash flow and growth prospects, despite a cautious income view for the current financial year.

Analysts say that buyback will not only improve key financial metrics such as EPS and ROE, it also offers tax-efficient returns to shareholders compared to dividends, while ptimizing izing capital structure between excess cash reserves.

HIST, Infosys Bayback supported the stock price after the declaration seen during the period of -6–6 -6, although analysts say short-term instability is possible.

Infosys’ stock today saw some profits in front of the board meeting and closed at around Rs 1.312. This year, the stock has been under pressure, as long as investors have been cautious on the point of view of growth.

Brokers have noted that the business environment remains uncertain due to unresolved tariffs and geographical political conditions, with consumers been alerted to discretionary costs and delays in decisions. The company has guided the current financial year for 1-3% growth in continuous currency.

In recent quarters, Infosys received about $ 8.8 billion big deals in the first quarter, with 55% net new. In addition, the company does not expect any significant changes in the second quarter and expect the operation to be at the same level.

By the end of June, the company seized a strong flow of around Rs 40,000 crore in cash and liquid investments, a means of strength in an indefinite environment.

Technically, analysts say the stock looks positive in the short term because the counter has important support for Rs 1485, which acts as a safety level for buyers.

“As long as it remains above this support, the trend is likely to remain upward. If the price is above Rs 1500, it can proceed to Rs 1540 and then move to Rs 1560.

(Disclaimer: The recommendations, suggestions, opinions and views given by experts are their own. This does not represent the views of the economic time)