In the United States, they look at how the customers are feeling and call it the customer confidence index. In China, they check with the factories and swear by the manufacturing index. In India., we do something more romantic. We watch who’s announcing a buyback next week! I may sound harsh, but if you track buybacks long enough, you’ll know when we run out of ideas. Let me offer evidence.
Take the IT sector. When all is sunshine, these guys sound like TED speakers. AI labs, quantum projects, transforming humanity, blah-blah-and-blah. The moment global demand sneezes, our guys catch a cold. And then an old headline is pulled out of the medical cupboard and brandished. “Company announces buyback.” That’s the equivalent of saying, “Hey, please clap.” It’s the corporate equivalent of prescribing your own medicine without checking with a medical doctor.
The unofficial explanation of buy backs is more entertaining. Buybacks show up when companies don’t know what else to do with their money. Innovation requires sleepless nights and the occasional spectacular failure. Buybacks need just a press release and a banker. And in these days of fund transfer, there is not even cheque writing!
INFSOYS IS BACK AT IT
The recent wave of buybacks in the IT sector coincides perfectly with shrinking margins and the great Indian IT identity crisis, where everyone keeps saying digital transformation. All that I see are PowerPoint slides.
This is where my story enters. I have held Infosys shares for so long and haven’t participated in its many buybacks. I have watched this stock through Y2K, tech summers, winters, autumn and spring. Loyalty or inertia, you might ask. Well, let history decide. So, when Infosys announces a buyback, I feel like a spouse watching the other half buy a treadmill. You smile, you encourage… But you know this won’t last. Dividends at least have the decency to say, “This is stable. Expect more.” Buybacks say, “This was a one-time surprise. Don’t get used to it.” Okay, there are some tax benefits, but that’s fine.
This is why repeated buybacks start feeling like a confession. It hints that the leadership is safer managing the present than imagining the future. It’s corporate India’s longest-running soap opera. The actors change; the script doesn’t. And yet, with Infosys, the disappointment feels personal. It was our first global success story. Some of that magic has dimmed.
Maybe that’s why this buyback season feels more like a sigh. Yes, they tell you the company trusts itself. But only innovation tells you the company still has a heartbeat worth listening to. And that is what many of us long-timers are waiting to see again.
