TCS is embarking on its fifth buyback initiative within a span of six years, having acquired shares worth Rs 66,000 crore in four separate tranches from shareholders during this period.
Tata Consultancy Services (TCS) disclosed plans for a share buyback valued at Rs 17,000 crore, with each share priced at Rs 4,150, effective on October 11. Notably, this buyback rate carries a 15 percent premium over the prevailing stock price.
On October 11, the company’s stock experienced a slight dip of 0.44 percent, closing at Rs 3,613, just prior to the forthcoming earnings release.
TCS intends to repurchase up to 4,09,63,855 shares, equivalent to 1.12 percent of the total equity. It’s essential to note that this buyback figure excludes transaction expenses, applicable taxes, and associated incidental costs.
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This marks the fifth share buyback endeavor by India’s premier information technology services firm in the last six years. The prior four buybacks amounted to Rs 66,000 crore in total.
TCS initiated its inaugural share buyback operation in February 2017, purchasing shares valued at Rs 16,000 crore with an 18 percent premium over the prevailing market price. Subsequent buybacks occurred in June 2018 and October 2020, each amounting to Rs 16,000 crore, with premiums of 18 and 10 percent, respectively.
The most recent buyback was executed in January 2022, with shares acquired at a 17 percent premium, totaling Rs 18,000 crore.
It’s noteworthy that the buyback price for 2023 stands at Rs 4,150, which is lower than the previous buyback rate of Rs 4,500.
TCS emphasized that shareholder approval, secured through a special resolution and a postal ballot, is a prerequisite for the buyback. Additional details, including the official announcement and Letter of Offer outlining the process, timelines, and regulatory compliance, will be provided in accordance with Buyback Regulations at a later date.
