Infosys, a leading IT services company, has launched its largest-ever share buyback program worth ₹18,000 crore. The buyback opened for subscription on November 20 and will be available until November 26, allowing eligible investors four trading days to tender their shares. To qualify, investors must have held shares in their demat accounts as of the record date, November 14.

The buyback aims to repurchase 10 crore fully paid-up equity shares, which comprise approximately 2.41% of the company's total paid-up capital. The buyback price has been set at ₹1,800 per share. Notably, there is a reservation for small shareholders, accounting for 15% of the total equity shares repurchased to ensure wider participation. This initiative includes about 25,85,684 small shareholders with shares valued under ₹2 lakh.

Promoters of Infosys, including prominent figures such as Nandan M Nilekani and Sudha Murty, will not participate in this buyback, which may enhance the acceptance ratio for public shareholders, especially retail investors, according to market analysts. The buyback ratio for small investors is 2:11, where they can tender two shares for every 11 shares held, while the general category ratio stands at 17:706.

Advisers view this buyback as a valuable opportunity for retail investors, emphasizing its attractiveness at a premium price. For lower-income slab investors, the buyback is likely to yield significant benefits, while those in higher tax brackets need to consider taxation implications. The entire buyback amount is considered taxable, which may diminish net gains, especially under higher tax slabs.

Market analysts suggest that for investors in the 30%+ tax brackets, selling shares in the market could present a more efficient option compared to participating in the buyback. Conversely, for lower tax bracket investors, the buyback route could still offer substantial incremental value. A critical factor contributing to investor confidence is Infosys' strong balance sheet, as it will finance the buyback entirely through internal cash and reserves, showcasing its robust cash flow generation capacity.

At the time of reporting, Infosys shares were trading at ₹1,538.00 on the BSE, reflecting a slight decline of 0.21%. This buyback is expected to provide a more favorable return on equity (ROE) while countering slower earnings per share (EPS) growth, benefiting long-term investors who choose not to participate in the buyback.