Feb 16, 2017 09:51 AM IST | Source: Moneycontrol.com

TCS gains 3% after it says board to consider share buyback

"The board of directors will consider a proposal for buyback of equity shares of the company at its meeting to be held on February 20, 2017," the IT services provider said in its filing.

TCS gains 3% after it says board to consider share buyback

Moneycontrol Bureau

Country's largest IT firm Tata Consultancy Services shares gained 2.7 percent in early trade Thursday on the news of share buyback.

"The board of directors will consider a proposal for buyback of equity shares of the company at its meeting to be held on February 20, 2017," the IT services provider said in its filing.

Promoter held 73.33 percent stake in the company and the rest is held by public as of December 2016.

Analysts say TCS can buy back its shares up to Rs 7,500 crore, which is 1.5 percent of market capitalisation post board nod while the firm can buy back shares up to Rs 18,500 crore, which is 3.9 percent of market capitalisation post approval from shareholders.

Currently, the company has net worth of USD 12.4 billion and cash of more than Rs 43,000 crore on its books.

Hence, 10 percent buyback may cost the company at USD 1.24 billion and at 25 percent share buyback may cost USD 3.1 billion.

Important point to watch out for would be whether promoters are going to participate in the buyback or not.

At 09:29 hours IST, the stock was quoting at Rs 2,460.50, up Rs 44.80, or 1.85 percent on the BSE.

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