TCS Buyback
TCS Buyback Price 2023: With the release of its second-quarter earnings on October 11, Tata Consultancy Services (TCS) also unveiled its fifth share buyback in the span of six years, acknowledging investors with the growing cash reserves.
The company board has approved buyback for an aggregate amount not exceeding Rs 17,000 crore being 1.12% of the total paid up equity share capital at Rs 4,150 per equity share, subject to approval from shareholders.
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The IT giant intends to acquire a maximum of 4,09,63,855 shares, constituting 1.12 percent of the overall equity. It’s important to note that the buyback size mentioned does not encompass transaction costs, applicable taxes, and other associated incidental expenses.
The company reported a net profit of Rs 11,342 crore for the September quarter of the current financial year, driven by a strong order book, especially in the BFSI segment, despite a tough business environment.
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In a share buyback, a company repurchases its own shares from shareholders, typically at a premium compared to current market prices, providing shareholders with the opportunity to exit the stock partially or entirely at a profit. Such a buyback serves as an indication of the management’s confidence in the company’s business.
JP Morgan was expecting a buyback size of Rs 18,000 crore, while Morgan Stanley pegged it between Rs 18,000 and 22,500 crore.
Prior to this, TCS executed share buybacks in 2017, 2018, 2020, and 2022. The IT giant, valued at over Rs 13 lakh crore, has repurchased shares totaling Rs 66,000 crore in the past six years.
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Previous Buyback
In 2017, TCS initiated its first share buyback, revealing a buyback program valued at Rs 16,000 crore in February of that year, featuring an 18 percent premium over prevailing prices. Subsequently, the company conducted two more buybacks, each amounting to Rs 16,000 crore, in June 2018 and October 2020, offering premiums of 18 percent and 10 percent, respectively. The most recent buyback, disclosed in January 2022, involved the purchase of shares worth Rs 18,000 crore at a premium of 17 percent.
TCS 2023 Buyback
As of June 30, 2023, TCS had cash and cash equivalent of Rs 7,123 crore on its balance sheet. This is likely to go higher given its track record of generating more than Rs 10,000 crore in cash from its operations during a quarter, Moneycontrol reported.
