TCS share buyback offer: IT company Tata Consultancy Services on March 5 announced the dates for its Rs 18,000 crore share buyback offer. This buyback offer was announced by the company in January this year. The offer will open on March 9 and close at 5 pm on March 23, the company said.
What will be the buyback ratio
Sharing the details of the buyback entitlement, TCS said the buyback ratio in the reserve category for small shareholders would be “1 equity share per 7 equity shares held at record date”.
The buyback ratio in the general category for all eligible shareholders will be “1 equity share per 108 equity shares held as on record date”.
How many buybacks has the company brought?
It is noteworthy that this will be the fourth buyback of TCS and in the last three buybacks, Tata Sons was the biggest beneficiary.
In this buyback offer, the promoters of TCS, Tata Sons and Tata Investment Corporation Ltd. (Tata Investment Corporation Ltd) has expressed its willingness to tender about 2.88 crore shares. In 2021, TCS had bought 5.3 crore shares at the rate of Rs 3,000 per share and accepted 3.333 crore shares under the offer. The company had brought two buybacks in 2017 and 2018 and the size was Rs 16,000 crore in both the rounds. At the end of September, 2021, TCS had cash and cash equivalents of approximately Rs 51,950 crore.
Tata Sons buys Air India for 18,000 crores
The development comes after Tata Sons bought Air India from the government for Rs 18,000 crore. The company will pay Rs 2,700 crore to the government and the rest will go towards repaying the loan. Tata Sons currently holds 72 per cent stake in TCS.
As per SEBI norms, 15% of the offer size (approximately Rs 2700 crore) is reserved for small investors. These investors include such investors who have shares up to Rs 2 lakh on record date.
When did other IT companies bring buyback offer?
In September 2021, Infosys announced a buyback of Rs 9,200 crore, while Wipro had bought back shares worth Rs 9,500 crore. In 2018, HCL Tech had bought back shares worth Rs 4,000 crore.
Analysts said share buybacks generally result in improved earnings per share and provide shareholders with surplus cash, which supports the stock in times of slowdown.
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