Will Infosys' share buyback boost investor confidence?

Mumbai: Investors may have a reason to cheer Infosys' latest share buyback announcement. In the past, the stock has mostly risen in three- and six-month periods after the information technology bellwether announces buying back the shares.

On Tuesday, Infosys shares rose 5% after the company said its board would meet on Thursday to decide on the buyback. Other stocks in the sector gained between 1% and 3% with the Nifty IT index jumping 2.8%. The benchmark Nifty gained 0.4%.

This will be the fifth share buyback by the IT firm, whose shares are down over 20% so far in 2025 amid concerns over a US slowdown.

Data from ETIG shows that from the day of the announcement of such an offer, Infosys shares rose on three out of the four occasions over three- and six-month periods. During the one-month periods, the share performances have been mixed.

Companies use share buybacks as a signal to convey to investors the management's confidence in the business. While buybacks result in a reduction in the number of outstanding shares, they also indicate how companies want to allocate the capital at that juncture.