Shares of the Indian IT services giant Infosys jumped 4.12% on Thursday morning, leading gains on the Nifty 50, after the company announced that its promoters will not participate in its upcoming Rs 18,000-crore share buyback program.
The market has interpreted the decision as a powerful signal of confidence from the founders in the company’s long-term growth prospects.
The stock surged to an intraday high of Rs 1,535, opening at Rs 1,510 against its previous close of Rs 1,472.40. Trading volumes were robust, with 72.97 lakh shares worth Rs 1,109.76 crore changing hands by 10:20 am.
Promoters to sit out the company’s largest-ever buyback
In a regulatory filing on Wednesday, Infosys disclosed that its promoter group, which includes co-founders like Narayana Murthy and Nandan Nilekani and their families, collectively holding a 13.05% stake, has opted out of the buyback.
The company stated in the filing:
Since the promoters and the promoter group of the company have declared their intention to not participate in the Buyback, Equity Shares held by them have not been considered for the purposes of computing the entitlement ratio.
The move is significant as it increases the acceptance ratio for all other shareholders, including retail and institutional investors, who choose to tender their shares in the program.
Details of the Rs 18,000-crore program
The buyback, the company’s fifth and largest to date, will see the IT major repurchase 10 crore shares at a price of Rs 1,800 per share.
This price represents a significant premium of 22% compared to the stock’s closing price on Wednesday. The record date for the buyback has not yet been announced.
The company’s history of buybacks includes a Rs 13,000-crore program in 2017, Rs 8,260 crore in 2019, and Rs 9,300 crore in 2022.
Broader IT sector sees strong gains
The positive sentiment around Infosys was reflected across the broader technology sector on Thursday.
Other IT majors also saw strong gains, with HCL Tech rising 3.19 percent, Tech Mahindra gaining 2.24%, Wipro up 1.98%, and TCS advancing 1.90%.
The rally comes as analysts maintain a positive outlook on the sector’s fundamentals. Following Infosys’s results last week, Axis Securities reiterated a ‘Buy’ rating on the stock with a target price of Rs 1,620.
The brokerage noted the company’s revised revenue guidance of 2-3% growth for FY26 and its significant progress in artificial intelligence, having delivered over 2,500 GenAI projects.
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