It’s lonely at the top. But not always. On Monday, India’s largest software company Tata Consultancy Services (TCS) leapt into India’s 10T League, a rarefied club of listed companies with a market capitalization of over ₹10 trillion. Until then, its sole member was the redoubtable Reliance Industries Ltd (RIL), which has had such a stellar run on stock markets this year that all its shares put together are worth well over ₹15 trillion now.
Till last week, few would have expected a Tata firm to make the grade. The group was seen as hard-pressed for funds to buy the Shapoorji Pallonji group’s 18.4% stake in its holding company, Tata Sons. Many reckoned that this closely-held entity would have to offload some of its TCS equity to get the money. This had pushed the software major’s stock down. But on Monday, TCS’s stock vaulted 7.3% on news over the weekend that its board would actually consider a proposal to buy back publicly-held shares. This is usually a device to reward shareholders, one that’s in vogue now that dividends are again taxable in the hands of shareholders. In this case, however, the plan is probably part of a larger group strategy.
