Indian IT giant Infosys witnessed an overwhelming response to its latest share buyback program that concluded on Wednesday, with investors tendering nearly 826 million shares against the company's target of purchasing just 100 million shares.
Massive Oversubscription Highlights Investor Confidence
The buyback offer, which closed on Wednesday, saw 82.6 crore shares being tendered by investors across categories, dramatically exceeding the 10 crore shares that Infosys had proposed to repurchase. Data from both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) revealed this substantial oversubscription, reflecting strong investor appetite for the buyback.
Notably, the promoters of Infosys decided to abstain from participating in this buyback offer. The company conducted the buyback through the tender offer route at a price of Rs 1,800 per share, representing a significant 15.6% premium to Infosys's closing price of Rs 1,557 on the BSE on Wednesday.
Institutional Investors Dominate Participation
The buyback witnessed particularly strong engagement from institutional investors, with qualified institutional buyers (QIBs) leading the charge by tendering 76.9 crore shares. Within this category, foreign institutional investors (FIIs) contributed 17.1 crore shares, while domestic financial institutions including banks, insurance companies, and other financial institutions added 8.8 crore shares.
Mutual funds emerged as another major participant group, tendering an impressive 45.2 crore shares, underscoring the sustained confidence that institutional investors maintain in Infosys's financial health and future prospects.
Retail and Non-Institutional Investor Engagement
Retail and non-institutional participation also remained healthy, demonstrating broad-based investor interest in the buyback program. Individual retail investors tendered 4.3 crore shares, while non-institutional investors added 1.3 crore shares. Other small investor groups contributed approximately 0.8 crore shares to the total tally.
The comprehensive response across all investor categories resulted in the final tally of 82.6 crore shares being tendered, clearly indicating widespread investor engagement with the buyback initiative.
Historical Context and Capital Allocation Strategy
The Infosys board had approved this Rs 18,000 crore share buyback in September, marking the largest buyback in the company's history and its fifth such program since 2017. The current buyback involves the purchase of 10 crore equity shares with a face value of Rs 5 each, representing approximately 2.4% of the company's total paid-up equity capital.
This buyback continues Infosys's consistent capital return policy. The company has returned approximately Rs 88,400 crore to shareholders, which constitutes about 85% of its cumulative free cash flow for the fiscal years 2020 through 2024, through a combination of dividends and buybacks, in strict adherence to its capital allocation framework.
