Tcs Buyback Date: TCS share buyback to begin on March 9: All you need to know

NEW DELHI: In a notification filed on its website, Tata Consultancy Services (TCS) has announced that it will commence buying back shares from March 9, Wednesday. Under the Rs 18,000 crore share buyback offer, TCS will continue accepting shares till March 23.

The company had fixed February 23, 2022 as the record date for the purpose of determining the buyback entitlement and the names of the equity shareholders, who would be eligible to participate in the buyback offer.

TCS plans to buy back 4 crore shares at Rs 4,500 per share, which is at 28 per cent premium to Friday’s closing price.

Here is all you need to know about the TCS share buyback offer:


Who can offer TCS shares for buyback?
All investors who held shares of the company as of February 23 can offer their shares in a defined ratio. For the buyback, TCS has defined two categories: reserved category for small shareholders and general category.

Who are small shareholders?
According to the buyback offer letter, any shareholder who held not more than 56 shares as on the record date are classified as small shareholders. The company said there are 21,10,826 small shareholders of the company with an aggregate shareholding of 4,10,51,350 shares. This is more than what the company plans to buy back from both categories.

That means, you will be able to offer only a part of your holding in the buyback.

How many shares are held by those in the general category?
The company said 3,65,80,00,023 shares were held by other shareholders in the general category as on the record date. This is 91 times the number of shares the company plans to buy back.

How many shares from each category will the company buy back?
TCS said it will buy back 60,00,000 shares from reserved category and 3,40,00,000 shares from the general category, in which all kinds of shareholders can participate.

Will the promoters also participate in the buyback?
Yes.

How many shares can I offer for buyback?
That depends on what category you fall in. If you are in the reserved category, the company will buy 14.61 per cent of total shares you hold. That means, TCS will purchase 1 share for every 7 you hold. In the general category, the ratio stands at 1 share for every 108 held.

You can offer additional shares, i.e., more than what you are entitled, but those will only be considered if all shareholders do not offer their entitled quota of shares, resulting in a shortfall of tendered shares.

I own less than 7 shares. Can I participate in the buyback?
Even though you will not get any ‘Buyback Entitlement’, you can still participate. TCS will first buy back shares offered to the extent of entitlement of every shareholder. In case, there are still shares left to be bought in the reserved category, TCS will buy shares from those who held less than 6 shares. Such investors will be allowed to tender one share each.

I don’t want to tender my shares. Can I sell my ‘Buyback Entitlement’ just like ‘Rights Entitlement’?
No, you cannot. You can choose not to participate and enjoy a resultant increase in the percentage shareholding, after the completion of the buyback, without any additional investment.

I have two demat accounts. How do I tender shares?
You are required to tender shares separately from both demat accounts. The company is using PAN to decide the number of shareholders, hence, it will club both applications and then calculate your entitlement ratio.

What is the process of tendering shares?
Exchanges will, on the company’s request, provide a separate acquisition window to facilitate placing of sell orders by eligible shareholders. You can contact your broker on how to access that window. Usually every broker has a separate portal to access such corporate actions.

Do I need to pay taxes for buyback proceeds?
The buyback offer letter states that income arising to the shareholder on account of buyback of shares as referred to in Section 115QA of the Income Tax Act is exempt from tax under the provisions of the amended section 10(34A) of the ITA with effect from July 5, 2019. The company is also not required to deduct tax at source on the consideration payable to resident shareholders pursuant to the buyback. Though you will be paying Securities Transaction Tax at 0.1 per cent of the value of the transaction, as it is the case when buying or selling shares.

You should consult your tax advisor for any clarification in this regard.

Who is managing the buyback offer?
JM Financial is managing the buyback offer. Link Intime is the registrar.