Indian's second largest Information Technology (IT) company, Infosys recorded a surge in its share price by as much as 4.1 percent intraday on Thursday, after the company said that the board will meet to consider buyback proposal on August 19.

In an exchange filing, the Bengaluru-based company informed the Bombay stock exchange that "... the board of directors ("Board") of Infosys... will consider a proposal for buyback of equity shares of the company at its meeting to be held on August 19, 2017."

Many of the country's IT majors are facing strong headwinds amid slowing growth in their core business due to automation and a crackdown on visas in countries like US.

As of June 30, 2017, Infosys is currently sitting on liquid assets (cash and investment) of over Rs 39,000 crore and is under pressure to distribute it to shareholders, NDTV reported. Analysts believe buyback of shares from the secondary market are always a tax effective way to distribute accumulated cash to shareholders, which further helps in increasing the company's return on investment.

Peers like Tata Consultancy Services (TCS), Wipro and HCL Technologies have completed their buyback, but Infosys got stuck in the process. TCS, India's biggest outsourcer completed an Rs 16,000 crore share buyback in May this year while Wipro announced an Rs 11,000 crore buyback last month.

The company believes that their buyback is complex unlike others as it has been in four different countries— India, the US, the UK and France, a BloombergQuint report said July.

The Infosys board is yet to declare the amount of share buyback, but most likely the IT major will go for around Rs 13,000 crore, to be paid out to shareholders via dividend or share buyback in 2017-18, BQ report suggest.

However, NDTV quoted analysts who believe that buybacks of can provide a temporary fillip to the shares of the company, but in the long run, share prices will be driven by earnings growth of the company.

So far in this calendar year Infosys shares have underperformed the broader index. As of 1:00 pm, Infosys shares are traded 3.89 percent higher at Rs. 1,014.75.