TCS announces ₹16,000 crore share buyback
1 min read . Updated: 07 Oct 2020, 06:53 PM IST
Premium- TCS shares today hit a record high of ₹2,769 on BSE
- In 2018, the Mumbai-based company had also undertaken a share buyback programme worth up to ₹16,000 crore
The board of IT major TCS today approved a proposal of share buyback worth up to ₹16,000 crore. TCS plans to buy back up to 5.33 crore equity shares of the company for an aggregate amount not exceeding 16,000 crore. TCS proposed to buy back shares at ₹3,000 per share, which is at a premium as compared to its today's closing price of ₹2,737.
TCS said buyback is proposed to be made from the shareholders of the company on a proportionate basis under the tender offer route using the stock exchange mechanism. "The buyback is subject to approval of the Members by means of a special resolution through a postal ballot. The public announcement setting out the process, timelines and other requisite details will be released in due course in accordance with the Buyback Regulations," it said.
In 2018, the Mumbai-based company had undertaken a share buyback programme 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 buyback, at ₹2,100 per equity share, had entailed up to 7.61 crore shares.
"Most IT companies have large surplus cash on books which can be used to reward shareholders either in the form of dividends or buybacks," said Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd.
In 2017 too, TCS had undertaken a similar share purchase programme.
TCS shares today hit a record high of ₹2,769 on expectations of a share buyback plan. TCS shares finally settled 0.8% higher at ₹2,737.
TCS on Monday became the second Indian firm after Reliance Industries to attain a market valuation of more than ₹10 lakh crore helped by a rally in its share price.
