TCS share buyback offer to stay open from March 9 to 23

A man walks out of the office of Tata Consultancy Services in Mumbai. | File image (PC-Reuters)

IT major Tata Consultancy Services (TCS) on March 5 released the dates of its Rs 18,000-crore share buyback offer, which was announced in January this year. The offer will open on March 9, and the window will close at 5 pm on March 23, it said.

Sharing details of the buyback entitlement, TCS said that in the reserved category for small shareholders, the ratio of buyback will be "1 equity share for every 7 equity shares held on the record date".

In the general category for all other eligible shareholders, the ratio of buyback will be "1 equity share for every 108 equity shares held on the record date".

Notably, this will be TCS' fourth buyback and, in the earlier three buybacks, Tata Sons was the biggest beneficiary.

In 2021, TCS bought back more than 53 million shares at Rs 3,000 a share and 33.33 million shares were accepted under the offer. In 2017 and 2018 as well, it undertook two buybacks and the size was around Rs 16,000 crore each. At the end of September 2021, TCS had cash and cash equivalents of Rs 51,950 crore.

The latest move comes after Tata Sons bought Air India from the government for Rs 18,000 crore. The firm will pay Rs 2,700 crore to the government and the rest will go to paying debt. Tata Sons holds a 72 percent stake in TCS currently.

In September 2021, Infosys announced a buyback of Rs 9,200 crore while in January 2021 Wipro conducted a Rs 9,500 crore buyback. In 2018, HCL Tech had undertaken a Rs 4000 crore buyback.

Analysts say share buybacks typically improve earnings per share and return surplus cash to shareholders while also supporting the stock during sluggish market conditions.