Infosys Board Evaluates Share Repurchase Plan on September 11th
In a notable move, Indian IT major Infosys has announced a proposal for a share buyback of fully paid-up equity shares on September 11, 2025. The proposed buyback, worth up to ₹9,300 crore, is a significant development in the company's strategy.
The decision comes amidst a period of correction in the IT sector, with the Nifty IT index experiencing a 0.74% fall on the same day. Infosys, along with Coforge and Wipro, were among the laggards in the index. The company's shares, which closed at ₹1,436.10 on the BSE on Monday, have declined by 15.6% over the past six months.
Despite these corrections, DSP Mutual Fund describes the IT sector as a "relative play," suggesting that it remains a viable investment option for now. However, the fund also cautions that the global IT sector is considered overheated, and prices could potentially correct further, making it an absolute play if they do.
The de-rating of Infosys, according to DSP Mutual Fund, is largely due to the absence of 'AI froth' in Indian IT majors. However, Infosys has been focusing on enabling GenAI and maintaining strong Total Contract Value pipelines, which could position the company favourably in the long run.
The recent buyback saw Infosys purchase 6.04 crore shares, with the highest price at which the shares were bought back being ₹1,623.90, and the lowest being ₹1,468.10. The maximum price at which the shares can be bought back is ₹1,850 per share.
It's worth noting that Infosys' earnings growth over the past three years has outpaced shareholder returns. However, the company's current Return on Equity (ROE) is at or above long-term averages, indicating a healthy financial performance.
The proposed buyback will be decided by the Chairman and CEO of Infosys Ltd., Salil Parekh, on September 11, 2025. Despite the challenges faced by the IT sector, Infosys, along with TCS, remains relatively well-positioned, offering potential for long-term growth.
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