TCS share buyback shows absurdities of India’s repurchase rules
Sebi's share buyback norms may have its quirks, but they are nothing compared to the oddities involved in valuing Indian IT stocks at the moment
Mumbai: Tata Consultancy Services Ltd (TCS) said last week that it would buy back roughly 2% of its shares at a 17% premium to prevailing prices. This should ideally have had almost no impact on the company’s share price, given the small reduction in the company’s share capital. But the TCS stock rose 3% after the share buyback announcement, largely because of a peculiarity in India’s share repurchase rules.