NEW DELHI: Tata consulting services (TCS) became the second Indian company after Reliance Industries to achieve a market valuation of more than Rs 10 lakh crore on Monday helped by a rally in its share price.
In morning trading, the stock was up more than 6 percent ahead of its board meeting later this week to consider a share buyback proposal.
The stock rose 6.18 percent to hit its BSE record of Rs 2,678.80.
It jumped 6.16 percent to Rs 2,679, its all-time high on the NSE.
Following the rally in its share price, the company’s market valuation jumped to Rs 10,03,012.43 crore in afternoon trading on the BSE.
Last month, TCS became the second Indian company to have a market valuation of more than Rs 9 lakh crore after Reliance Industries Limited.
It is the second most valuable national company in terms of market capitalization.
Meanwhile, Reliance Industries Limited is the first Indian company to cross the market valuation mark of Rs 10 lakh crore. Its market valuation is currently 15.02.355.71 crore, the highest for any publicly traded company in the country.
TCS in a regulatory filing late Sunday said that “… the board of directors will consider a proposal to buy back shares of the company, at its meeting to be held on October 7, 2020.”
No other details of the buyback plan were disclosed.
TCS’s board is also scheduled to consider its financial results for the September quarter and the declaration of a second interim dividend for equity shareholders at that meeting.
In 2018, the Mumbai-based company had embarked on a share buyback program worth up to Rs 16 billion.
The buyback, at Rs 2,100 per equity share, had involved shares of up to Rs 7.61 million. Also in 2017, TCS had embarked on a similar share purchase program.
TCS had announced the mega buyback offer as part of its long-term capital allocation policy of returning excess cash to shareholders.
“TCS has announced that the board of directors will consider an equity share buyback proposal … We believe that while this is a positive development for the company, it is also a positive development for the sector as it could be a precursor to other IT companies will follow suit.
“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, Angel Broking Ltd.
On video: TCS surpasses the Rs 10-lakh-crore mark; second Indian company to do so
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