Tata Consultancy Services (TCS) has announced a share buyback for £1.7 billion at a price of Rs 4,150 a share on October 11. The buyback price is at a premium of about 15 per cent to the prevailing price. The stock ended 0.44 per cent down at Rs 3,613 on October 11, ahead of the company’s earnings release.
The company will be buying up to 4,09,63,855 shares representing 1.12 per cent of the total equity. The buyback size does not include transaction costs, applicable taxes and other incidental and related expenses. This is the fifth share buyback by India’s largest information technology services company in the last six years. The company bought £6.6 billion worth of shares in four such exercises.
TCS bought back its shares for the first time in February 2017. It bought shares worth £1.6 billion at an 18 per cent premium to the prevailing price. This was followed by two buybacks of £1.6 billion each in June 2018 and October 2020, at an 18 and 10 per cent premium, respectively.
The last time the IT major bought back shares from holders was in January 2022 at a premium of 17 per cent a piece, buying shares worth £1.8 billion.
TCS' 2023 buyback price is lower than the previous buyback price of Rs 4,500. "The buyback is subject to approval of the shareholders by means of a special resolution through a postal ballot," TCS said in an exchange filing. "The public announcement and Letter of Offer setting out the process, timelines and other requisite details will be released in due course in accordance with the Buyback Regulations."