TCS’ Rs 16,000 crore share buyback: 2nd mega buyback in 2 years; check premium, other details

India’s largest IT company TCS (Tata Consultancy Services) on Friday approved a share buyback program of Rs 16,000 crore in which the company will be repurchasing about 7.61 crore equity shares (TCS share buyback size). TCS will be buying back the shares at Rs 2,100 per equity share (TCS share buyback price) which is about 14% premium from Friday’s closing price of Rs 1,841.45 on BSE. The said buyback is 1.99% of the total paid-up equity capital.

“The board of directors of the company at its meeting held today at 11.00 am and concluded at 2.35 pm has approved a proposal to buyback up to 7,61,90,476 Equity Shares (seven crore sixty-one lakh ninety thousand four hundred and seventy-six only) of the company for an aggregate amount not exceeding Rs 16,000 crore (rupees sixteen thousand crore only) (here in after referred to as the “buyback size”) being 1.99% of the total paid up equity share capital, at Rs 2,100 (Rupees two thousand one hundred only) per Equity Share (hereinafter referred to as the “buyback price”),” TCS said in an exchange filing.

Following the development, shares of Mumbai-headquartered IT giant TCS emerged among the top three gainers on Bombay Stock Exchange (BSE). The stock of Tata Group’s cash cow TCS rose as much as 3.17% to an all-time high of Rs 1,849 on BSE while the stock surged 3.33% to an all-time high of Rs 1,847.1 on NSE on Friday. On the counters of National Stock Exchange (NSE), TCS topped the trading turnover among all the listed equity shares on the exchange. As at 3:14 pm, more than 82 crore equity shares of TCS got exchanged on both NSE and BSE with about 75 crore equity shares being traded on NSE alone.

Earlier last year only, TCS successfully carried a share buyback program of Rs 16,000 crore which is touted as the largest share buyback so far in Indian history. 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, TCS said in a statement.

According to latest shareholding data, promoter companies held 71.92% stake in TCS at the end of 8 June 2018. Other shareholders stake in TCS include Indian financial institutions/Banks/MF stand at 6.77%; FIIs/FPIs/NRls/Foreign National and OCB at 17.13%; Resident Individuals and others at 3.52% while clearing members and corporate bodies /LLP/Trust/NBFC stands at 0.09% and 0.57%, respectively.

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