India’s number two IT company Infosys has made a big announcement on Thursday. The company has decided to share the share. Infosys will again buy 10 million shares of the company from investors at a price of Rs 1800 per stock. In this, the company will cost a total of Rs 18,000 crore and investors will get a premium of about 19 percent. Let us understand what is this share buyback and why does a company start buying its shares again?
In the information given to the market, the company told that the buyback will be done completely in the cash. Infosys also stated that the size of the buyback will be less than 25 percent of the total paid up capital and free reserve. Also, the company also made it clear that this calculation has been done on the basis of latest audited interim condensed standalone and consolidated financial data till June 30, 2025.
What would be share buyback?
Share buyback simply means when a company buys its own shares back from the market. The Mane company reduces its stake by purchasing their shares from its shareholders. This reduces the number of shares that the company has. This is usually done when the company feels that the value of its shares is being low in the market or it has additional cash that it wants to invest. Due to this, there are chances of increasing the price of the company’s shares.
Suppose Infosys has 100 crore shares and the company is deciding to buy 10 crore shares. If the current price of the stock is Rs 1800, then the company will have to spend Rs 10 crore x 1800 rupees = 18,000 crore rupees. Investors will have to pay so much money in cash in buying shares again of Maltab Company. Now what can happen after the buyback of the matter, then there is a different mathed to understand it. Now once again, assume that Infosys has an annual earning of Rs 25,000 crore. Before the buyback, the income per share was 25,000 crore/ 100 crore = ie 250 rupees. Now, since the company is buying 10 crore shares, the total share will save 90 crores, ie EPS = 25,000 crore/ 90 crore = will be about Rs 277 and the EPS increase can increase the value of the company’s shares.
Even before this, buyback
Infosys has also made many share buybacks before, in the year 2017, 2019, and 2021, the company has bought the share holders to make profits. This buyback is also not the largest buyback in the Indian market. Right now the biggest buyback is from Mukesh Ambani’s company Reliance Industries. But this buyback of Infosys is being called the largest buyback of the IT sector.