TCS Announces Rs 17,000 Crore Share Buyback at 15% Premium
In a significant move that has set the Indian corporate landscape abuzz, Tata Consultancy Services (TCS Announces), the country’s leading information technology services company, has revealed plans for a substantial share buyback worth a staggering Rs 17,000 crore. This announcement, made on October 11, is a testament to TCS’s commitment to delivering value to its shareholders.
What’s even more noteworthy is that TCS has set the buyback price at Rs 4,150 per share, offering a handsome 15% premium above the current market price. This strategic move showcases the company’s confidence in its financial stability and growth prospects. Although the news briefly impacted the stock price, with a slight dip of 0.44% to Rs 3,613 on October 11, TCS shareholders can look forward to this generous buyback scheme.
The buyback will encompass a total of 4,09,63,855 shares, which represents 1.12% of the company’s total equity. However, it’s essential to note that this size does not include transaction costs, applicable taxes, and other associated expenses.
This is not the first time TCS has ventured into the share buyback arena. In fact, this marks the fifth buyback initiative by the company in the last six years. TCS made its debut in the buyback world in February 2017 when it repurchased shares worth Rs 16,000 crore at an 18% premium over the then-prevailing price. Subsequently, it conducted two more buybacks in June 2018 and October 2020, amounting to Rs 16,000 crore each, at premiums of 18% and 10%, respectively. The most recent buyback prior to this announcement was in January 2022, where shares were repurchased at a 17% premium, totaling Rs 18,000 crore.
It’s worth mentioning that the buyback price for 2023 is set at Rs 4,150, which is slightly lower than the previous buyback price of Rs 4,500, but the premium offered adds a sweet incentive for shareholders.
The announcement has also highlighted TCS’s robust financial position. The company’s order book at the close of Q2FY24 was a staggering $11.2 billion, closely aligned with analyst estimates ranging from $11 to $13 billion. The book-to-bill ratio stood at a promising 1.6, further showcasing TCS’s financial stability.
TCS has emphasized that the buyback is subject to approval by the shareholders through a special resolution via a postal ballot. The company has assured the public that the comprehensive details, including the process and timelines, will be released in accordance with Buyback Regulations in due course.
This latest share buyback initiative by TCS underlines the company’s commitment to rewarding its loyal shareholders while also affirming its strong financial standing. TCS continues to make strides in the IT industry and create value for its investors.
In conclusion, TCS’s Rs 17,000 crore share buyback at a 15% premium has sent waves of anticipation through the Indian corporate landscape, leaving shareholders eagerly awaiting further details on this generous offer.