3 Undervalued Stocks Trading Below Their Buyback Prices: A Closer Look
A buyback price is what a company is willing to pay to repurchase its own shares from shareholders, typically higher than the current market price. Companies initiate buybacks for various reasons: they believe their stock is undervalued, they have excess cash, or they want to improve financial metrics like earnings per share (EPS). However, if the stock continues to trade significantly below the buyback price, it raises questions about the company's valuation, market sentiment, and potential long-term investment opportunities. In this article, we will explore three such stocks.
Cera Sanitaryware Limited is an Indian company that produces and sells bathroom and kitchen products, including toilets, wash basins, faucets, showers, tiles, and kitchen sinks. Founded in 1980 and headquartered in Ahmedabad, Cera primarily serves the housing and real estate sectors. In August 2024, Cera Sanitaryware announced a buyback of Rs 130 crore at Rs 12,000 per share. Currently, the stock is trading at Rs 5,230, representing a sharp 56 percent discount to its buyback price.
Tanla Platforms Limited is an Indian technology company that provides cloud-based communication services to businesses. It enables companies to send SMS, WhatsApp messages, emails, and voice calls securely and on a large scale. Tanla's platforms also assist in spam control, fraud prevention, and customer engagement through AI. Founded in 1995 and based in Hyderabad, Tanla partners with large enterprises both in India and abroad. In June 2025, Tanla Platforms announced a Rs 175 crore buyback at Rs 875 per share. The shares are currently trading at Rs 522.45, a 40 percent discount compared to the buyback price.
Infosys Limited is a leading Indian IT services company that supports and upgrades the technology of global businesses. It offers software development, cloud services, data analytics, artificial intelligence, cybersecurity, and digital transformation solutions to various sectors, including banking, healthcare, retail, telecom, and manufacturing. Established in 1981 and headquartered in Bengaluru, Infosys generates most of its revenue from long-term projects for clients in the US and Europe. In November 2025, Infosys announced one of the largest buybacks in India, with a plan to repurchase shares at Rs 1,800 per share under a Rs 18,000 crore tender offer. The stock is currently trading at Rs 1,629.50, a 9.4 percent discount to its buyback price.
The significant discounts between the market prices and buyback prices of these stocks raise several questions. Are these discounts a result of market pessimism, or do they present an opportunity for long-term investors? While the discounts are substantial, investors should consider the underlying fundamentals of each company, market conditions, and the broader economic landscape before making investment decisions.
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