Infosys buyback: Rs 18,000 crore at 19% premium excites stock market; here’s what experts recommend for investors

Infosys’ announcement of its largest-ever share buyback, valued at Rs 18,000 crore and priced at Rs 1,800 per share, has sparked investor interest. The offer, representing about 10 crore shares or 2.41% of the company’s equity, comes at a 19% premium over Thursday’s closing price of Rs 1,512 and is positioned as a “buy on dips” opportunity by market experts.The buyback, conducted through the tender route, will be open to all equity shareholders as on the record date, which the company will announce later. Shareholders can offer their shares for repurchase at a fixed price for a limited period, subject to shareholder approval.Analysts suggest accumulation on dips, short-term upside visibleNilesh Jain, Head Vice President, Equity Research Technical and Derivatives at Centrum Broking, said the stock is currently trading at corrected levels and advised investors to accumulate shares on dips, with potential to move gradually toward Rs 1,600-1,660. Support levels are placed at Rs 1,440, according to an ET report.Anuj Gupta, Director at Ya Wealth Global Research, noted that the stock is poised for a short-term uptick, targeting Rs 1,700-1,800. He added that existing shareholders should hold for medium-to-long-term gains. While Infosys shares fell 1.3% to Rs 1,512 on Thursday, they had rallied more than 6% over the previous two sessions after the buyback announcement.The stock remains down 25% from its 52-week high of Rs 2,006.45 and is trading below its 50-day and 200-day simple moving averages of Rs 1,519.1 and Rs 1,664.5, respectively.Retail participation, EPS boost and long-term considerationsRajesh Palviya, Senior VP Research-Head Technical & Derivatives at Axis Securities, said SEBI rules require at least a 15% buyback quota for retail investors holding shares worth up to Rs 2 lakh. Given the size of the offer, retail participation is expected to be between 20-35%. Historical trends show retail acceptance ratios of 100% in 2017, 30-40% in 2019, and 25-30% in 2022.Analysts believe the timing of the buyback could provide additional support. Market expert Neeraj Dewan told ET, “Valuations are more attractive now, and the stock has been consolidating at lower levels. Depending on the premium offered, investors could find arbitrage opportunities, with short-term upside possible.”Akshay Badjate, Fund Manager at Merisis PMS, highlighted Infosys’ strong balance sheet, with over Rs 40,000 crore in cash and liquid investments and annual free cash flow exceeding Rs 30,000 crore. “This buyback could lift EPS by 3-5% in the near term,” he said, while cautioning that a long-term strategy for investing excess cash in emerging technologies such as AI, quantum computing, or startups would have been more beneficial.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)