Tata Consultancy Services (TCS) board in January approved a proposal to buy back upto 4,00,00,000 Stocks for an amount not exceeding ₹18,000 crore at ₹4,500 per share. TCS' share buyback offer opened on March 9 and closes today. The share buyback program of India’s second-most valuable firm, has attracted a large number of shareholders.
March 23, 2022 is the last date to tender TCS shares for the buyback. The entitlement ratio is 1 share for 7 shares held for retail shareholders whereas for the non-retail category it is 1 for 108 held.
“Based on the current overwhelming response towards buyback from the retail shareholder, approx. acceptance ratio will be between 14% and 15%. Short-term investors must grab this opportunity and tender their shares. Even the long-term shareholders should tender their shares as the buyback is tax-free. Long-term shareholders should repurchase the tendered shares from the open market. For the non tendered shares, investors can hold the shares because of the strong fundamentals of the company and strong tailwinds in the IT Sector, " said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The last date for receipt of completed Tender Forms and other specified documents including physical share certificates (if and as applicable) by the Registrar is also March 23. The last date of settlement of bids on the stock exchanges is April 1, 2022, TCS had said.
This is TCS' fourth and biggest buyback in the past 5 years. The previous buyback of the IT giant, worth about ₹16,000 crore, had opened on December 18, 2020, and closed on January 1, 2021.
Shares of TCS were trading 0.2% higher at ₹3,710 apiece on the BSE in Wednesday's afternoon deals. The IT stock is up over 18% in a year's period whereas it is down about 3% in 2022 (year-to-date or YTD) so far.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
