Tata Consultancy Services (TCS) has announced a share buyback for Rs 17,000 crore at a price of Rs 4,150 a share on October 11. The buyback price is at a premium of about 15 percent to the prevailing price.
The stock ended 0.44 percent 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 percent 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 Rs 66,000 crore worth of shares in four such exercises.
TCS bought back its shares for the first time in February 2017. It bought shares worth Rs 16,000 crore at an 18 percent premium to the prevailing price. This was followed by two buybacks of Rs 16,000-crore each in June 2018 and October 2020, at an 18 and 10 percent premium, respectively.
The last time the IT major bought back shares from holders was in January 2022 at a premium of 17 percent a piece, buying shares worth Rs 18,000 crore.
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."
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