The news of the share buyback proposal propelled Infosys shares 4.54% on Thursday to close at Rs1,021.15 apiece.
The company, which did not provide any details on the buyback, said the outcome of the board meeting will be announced after the meeting on August 19.
The company recently adopted new Articles of Association, making provision for buyback. Wipro too had announced its intentions for share buyback, earlier this year.
The cash-rich technology major had in April proposed to pay Rs 13,000 crore to shareholders through a buyback, but the proposal was tied in regulatory knots.
A share buyback is a process where a company repurchases its stock, reducing the number of shares of the company available in the market.
In a letter to various stock exchanges, India's second largest IT company, Infosys, said that it will restart trading on the markets on August 22, 2017. Buybacks are a better way to reward shareholders, as paying dividends attracts a hefty dividend distribution tax, said the analyst. Infosys Limited is engaged in consulting, technology, outsourcing, and next-generation services. Sharma believes that post buyback, the company may resort to inorganic acquisitions to utilise the excess cash. More recently, there have been reports quoted company's co-chairman Ravi Venkatesan as saying that the Infosys board will be open to considering giving Murthy a formal role if he wished to have one.