Why Infosys’ Stock is Rising: The Buyback Buzz Explained

Infosys, one of India’s largest IT services companies, has seen its share price move upward on September 9, 2025. The stock rose by around 5% in today’s trade after the company announced that its board will consider a new share buyback proposal. Investors generally view buybacks as a strong positive signal, and this has given Infosys shares a much-needed boost after a period of underperformance.

The Buyback Announcement

On September 8, 2025, Infosys informed stock exchanges that its Board of Directors will meet on September 11, 2025 to consider a proposal for buyback of fully paid-up equity shares. The decision will be taken in line with SEBI’s Buy-Back of Securities Regulations, and the outcome will be communicated after the board meeting. 

Although the exact size of the buyback has not been disclosed yet, the announcement alone lifted investor sentiment, with Infosys share rising by around 5 percent on September 9, 2025.

Understand How Share Buyback Works

• Imagine a classroom party where the teacher brings 10 samosas to be shared equally among 10 students. Each student gets 1 samosa.
• Now, if 2 students leave the party (like a company buying back shares), the same 10 samosas are now divided among 8 students.
• Each remaining student’s share goes up from 1 samosa to 1.25 samosas without them doing anything extra.
• In the same way, when a company like Infosys buys back its own shares, the total number of shares comes down, but the company’s profits remain the same.
• This means every remaining shareholder’s share of the profit increases, improving measures like Earnings Per Share (EPS) and overall ownership value.
• For shareholders who sell, the buyback usually happens at a premium price, giving them an immediate gain.

Infosys’ last Buyback

Infosys is no stranger to buybacks. In fact, it has used this tool consistently over the last decade as a way to return surplus cash to shareholders. Last buyback detail are as follows

Infosys’ last buyback took place in 2022, when the company repurchased shares worth ₹9,300 crore. The buyback was carried out through the open market route at a maximum price of ₹1,850 per share, which represented a premium of around 30 percent at the time. 

This program reinforced Infosys’ strategy of returning surplus cash to shareholders while also supporting its share price during a volatile market environment. The move was widely seen as a continuation of the company’s consistent capital return policy, following earlier buybacks in 2017, 2019, and 2021.

Why a Buyback Now?

The timing of this buyback is important. Infosys’ stock has not been performing well in the recent past. Over the last 12 months, the share price has fallen by almost 20 percent. This underperformance is not unique to Infosys; the broader IT index has also lost about 17.5 percent during the same period.Several factors have weighed on the stock. 

• Rising US tariffs and protectionist policies have made global business conditions more uncertain. Geopolitical tensions have disrupted spending patterns, particularly in the US and Europe, which are key markets for Infosys. 
• Additionally, client companies have become cautious with their technology budgets, limiting growth for IT service providers.
• Against this backdrop, a buyback serves multiple purposes. It supports the stock price by creating demand for the shares. It improves return ratios such as Earnings Per Share (EPS) and Return on Equity (RoE) by reducing the total number of shares in circulation.
• Most importantly, it signals confidence from management that Infosys is financially strong and prepared to reward shareholders even during challenging times.

Market Impact and Analyst Perspective

The market reacted quickly to the buyback news. Infosys shares rose immediately, and the positive sentiment also spilled over to other IT stocks, helping the sector recover from a recent losing streak. 

• Analysts noted that while the broader environment remains uncertain, the buyback provides a sense of stability. 
• Many experts believe the buyback size could be around 1.3 to 2 percent of the company’s equity, which is significant enough to reassure investors without straining the balance sheet.
• For analysts, the timing is just as important as the size. Announcing a buyback during a period of stock price weakness is seen as a deliberate signal that the company is standing behind its long-term growth story and is willing to support its shareholders through capital returns.

Other Factors Behind the Stock Movement

While the buyback announcement is the immediate trigger, other business developments are also influencing investor sentiment. 

In the first quarter of FY26, Infosys reported sequential revenue growth, supported by several large deal wins. The company has revised its revenue growth guidance for the year to a more realistic range of 1 to 3 percent, which signals cautious optimism.

Infosys is also investing heavily in emerging technologies such as artificial intelligence, cloud computing, and cybersecurity. Its focus on enterprise AI, in particular, has helped it secure new deals with global clients. These efforts suggest that the company is not only returning cash to shareholders but also preparing for future growth in areas that are becoming central to enterprise technology.

At the same time, challenges remain. The macroeconomic environment continues to be uncertain, and client budgets are still under pressure. This means growth may be slower than in past years, but Infosys is attempting to balance immediate shareholder returns with long-term strategic investments.

Conclusion

Infosys’ share price rise on September 9, 2025 can be traced directly to the announcement of a potential buyback. Investors value buybacks because they provide direct returns, improve financial ratios, and signal confidence from management. For Infosys, the announcement comes at a time when the stock has been under pressure, making the move even more impactful.

By combining shareholder rewards with investments in emerging technologies, Infosys is trying to reassure the market that it can weather near-term challenges while positioning itself for the future. The outcome of the board meeting on September 11, 2025 will provide more clarity on the scale of the buyback, but for now, the proposal alone has been enough to lift investor sentiment and give the stock a strong upward push.

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