TCS Board Approves Rs 18,000 cr Share Buyback; What Investors Should Know


Tata Consultancy Services (TCS) said that the members of the company have approved the buyback of shares worth up to Rs 18,000 crore by passing a special resolution through postal ballot. “The members of the company have approved the buyback by passing a special resolution through postal ballot,” the company said in a stock exchange filing. On January 12, 2022, the board of directors of TCS had announced the buyback of up to 4,00,00,000 fully paid-up equity shares of the face value of Re 1 each at Rs 4,500 per equity share for an aggregate amount of Rs 18,000 crore.

Eligible Participants

TCS has fixed fixed Wednesday, February 23, 2022, as the record date for the purpose of determining the entitlement and the names of the equity shareholders who will be eligible to participate in the buyback.

Tata Sons, Tata Investment Corporation to participate

In a regulatory filling, the company announced that Tata Consultancy Services (TCS) promoters – Tata Sons and Tata Investment Corporation Ltd – intend to participate in the IT service major’s Rs 18,000 crore buyback offer by tendering about 2.88 crore shares.

Voting and Result Dates

According to a postal ballot notice by the company, the remote e-voting period will commence from January 14, 2022 and end on February 12, 2022. The results of the postal ballot will be announced on February 15, 2022, it added.

Tata Sons, which holds about 266.91 crore shares, intends to tender 2.88 crore shares, while Tata Investment Corporation Limited (which holds 10,23,685 shares) intends to tender 11,055 shares.

Previous Buyback by TCS

The previous buyback of the TCS, worth about Rs 16,000 crore, had opened on December 18, 2020, and closed on January 1, 2021, in which group holding firm Tata Sons had tendered shares worth Rs 9,997.5 crore. Over 5.33 crore equity shares were bought at that time (offer price was Rs 3,000 apiece) and out of the total, Tata Sons’ 3,33,25,118 shares were accepted under the buyback offer.

During 2017 and 2018, TCS had initiated two equity share buybacks, both of which were for an aggregate amount of Rs 16,000 crore. In 2018 the shares were bought back by TCS at a price of Rs 2,100 per share, a 14 per cent premium to the stock price back then. TCS bought 7.61 crore equity shares back then. In 2017 the Rs 16,000-crore share buyback, saw TCS buy shares at a price of Rs 2,850 per share, again at a premium to the market value back then.

TCS Q3 results

The company last month reported its earnings for the quarter ended December 2021. It reported a 12.2 per cent rise in its consolidated net profit to Rs 9,769 crore. Revenue of the Mumbai-based firm grew 16.3 per cent in the quarter under review to Rs 48,885 crore from Rs 42,015 crore in the corresponding period last fiscal. The company has also announced a dividend of Rs 7 per share.

On Friday, the TCS stock had closed at Rs 3,693, down Rs 77.35 or 2.05 per cent, on the NSE.

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