TCS Share Buyback: The debt of the stock boy back offer of the country’s largest information technology services company Tata Consultancy Services (TCS) has arrived. TCB’s 16 thousand crore shareback buyback offer will open on 18 December and will close on 1 January 2021. Explain that last month, the share holders of TCS approved the share buyback program. TCS will buy back 5,33,33,333 shares from investors. Based on the market capitalization of TCS, TCS will spend around 1.5% of the MCAP on this buyback program.
Boyback will be available at Rs 3000 per share
TCS will buyback 5.3 crore shares from shareholders at a price of Rs 3000 per share. It is clear that investors have a chance to earn good money by taking part in this offer. Right now the share price is running around Rs 2800. TCS said in a regulatory filing that the record date for share buyback is 28 November. The share price in November last was Rs 2700. The last date for bid settlement on stock exchanges is 12 January 2021. Recently, TCS Management had said that our objective is to benefit the shareholders of the company.
What is share buyback
When a company buys its own shares from investors, it is called buyback. You can also consider it the reverse of an IPO. These shares cease to exist after the buyback process is completed. For buyback mainly two methods – tender offer or open market are used.
Why do companies buyback
The biggest reason for this is the excess cash in the company’s balance sheet. It is not considered good to have too much cash with the company. It is believed that the company is not able to use its cash. The company uses its excess cash through share buybacks. Many times the company feels that its share price is low (undervalued), then it tries to increase it through buyback.
What is the process
First, the company’s board approves the proposal for share buyback. After this, the company announces the program for buyback. It mentions record date and buyback period. Record debt means that the investors who hold shares of the company till that day will be able to participate in the buyback. Buybacks affect the company and its stock in many ways. The number of shares of a company present for trading in the stock market decreases. This increases earnings per share (EPS). The PE of the stock also increases. This does not change the business of the company.
Source: www.financialexpress.com