The board of major IT company TCS today approved a share buyback proposal worth up to ₹16,000 crore. TCS plans to buy back up to 5.33 crore of company shares for a total amount not to exceed 16,000 crore. TCS proposed to buy back shares from ₹3,000 per share, which is a premium compared to its closing price today of ₹2,737.
TCS said that it is proposed that the buyback be made to the shareholders of the company in a proportional way according to the public offering route through the mechanism of the stock exchange. “The repurchase is subject to the approval of the members by means of a special resolution through a postal ballot. The public announcement that establishes the process, the deadlines and other necessary details will be released in due course in accordance with the Repurchase Regulation, “he said. .
In 2018, the Mumbai-based company had embarked on a share buyback program worth up to ₹16,000 crore. The company had announced the mega buyback offer as part of its long-term capital allocation policy of returning excess cash to shareholders. The repurchase, in ₹2,100 per share of capital, had involved up to 7.61 million shares.
“Most IT companies have large surplus cash on the books that can be used to reward shareholders in the form of dividends or buybacks,” said Jyoti Roy, DVP, equity strategist at Angel Broking Ltd.
Also in 2017, TCS had embarked on a similar share purchase program.
TCS shares today reached a record high of ₹2,769 on the expectations of a share buyback plan. TCS shares eventually closed 0.8% higher in ₹2,737.
TCS on Monday became the second Indian firm after Reliance Industries to achieve a market valuation of more than ₹Rs 10 crore lakh helped by a rally in its share price.
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