Infosys Buyback Sparks 5% Surge, Potential Arbitrage Opportunity

On September 11, 2025, Infosys, one of India's leading information technology companies, announced a potential share buyback, sparking renewed investor interest as the stock rose as much as 5% intraday. The buyback could be executed through either a tender offer or the open market route.

Under the tender offer system, Infosys would offer to buy shares from existing shareholders at a fixed price, usually at a premium to the current market price. Investors can then choose whether to sell their shares within a specified time frame. Alternatively, the open market route would allow Infosys to directly purchase its shares from the stock exchange, similar to other investors, at prevailing market prices without an obligation to pay a premium.

The latest buyback comes at a crucial juncture for Infosys, as the company's stock has significantly underperformed, falling nearly 25% over the past year and declining 24% on a year-to-date basis. Analysts say the move may provide much-needed support to investor sentiment, which has been dampened by headwinds facing the technology sector and consistent selling by foreign institutional investors (FIIs).

Depending on the premium offered in the buyback, investors could see a clear arbitrage opportunity. At the same time, the favorable valuations from a historical perspective may help the stock find support at these levels, while a short-term upside could also play out due to the buyback premium.