BackTCS to start ₹16,000 crore share buyback from 18 May
TCS's share buyback programme, which received shareholder approval last month, will open on 18 May and close on 31 May
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New Delhi: Tata Consultancy Services (TCS) will commence its Rs16,000-crore mega buyback offer from 18 May. The buyback programme, which received shareholder approval last month, will open on 18 May and close on 31 May, the company said in a regulatory filing.
TCS will dispatch the Letter of Offer for the buyback to eligible shareholders on or before May 16, it added. The share buyback, if successful, will be India’s biggest, surpassing Reliance Industries’ 2012 share repurchase of ₹ 10,400 crore.
Share buybacks typically improve earnings per share and return surplus cash to shareholders while also supporting share price during periods of sluggish market condition.
The Indian IT companies have been under pressure to return excess cash on their books to shareholders through generous dividends and buybacks. TCS had earlier said that it received suggestions from investors over the need for certainty on dividend policy along with share buyback to distribute the cash.
The Mumbai-based company has a cash pile of ₹ 43,169 crore, which is nearly 10% of the company’s market capitalisation. TCS rival, Infosys has also announced its capital allocation policy to return up to ₹ 13,000 crore this financial year through dividend and/or buyback.
Earlier this year, Cognizant announced a $3.4 billion share buyback, bowing to pressure from activist investor Elliott Management Corp.
Smaller peer, HCL Technologies has also approved a buyback of up to 3.50 crore shares worth ₹ 3,500 crore. The proposed shares under the buyback represent 2.85 per cent of the total paid-up capital at ₹ 2,850 per equity share.
In February, the board of TCS had approved the proposal to buy back up to 5.61 crore equity shares for an aggregate amount not exceeding ₹ 16,000 crore.
Also Read: TCS shareholders approve Rs16,000 crore share buyback
In a separate filing, TCS said Vijay Kelkar has ceased to be a Director on the company Board from 14 May, in accordance with the retirement age policy of the company.
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