The Tata Consultancy Services (TCS) board today announced buyback of up to 5.6 crore equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore. The buyback offer constitutes 2.85 percent of total paid-up equity share capital.
The buyback price has been set at Rs 2,850 per share, a 11 percent premium to the current market price.
“The 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 in accordance with the provisions contained in the SEBI (Buy Back of Securities) Regulations, 1998 (hereinafter referred to as the "Buyback Regulations") and the Companies Act, 2013 and rules made thereunder,” TCS told stock exchanges.
The promoters currently hold 73.33 percent stake in the company.
The company said that the buyback is subject to approval of the members via a special resolution through a postal ballot.
The company’s chief N Chandrasekaran, who is leaving TCS to take charge of the Tata Group, had earlier said that tech companies have large cash balances and TCS does not want to face cash shortage in case of future acquisitions.
Indian IT companies have been facing growth challenges. Recently, Cognizant also announced a USD 3.4 billion buyback plan.