Tata Consultancy Services (TCS) began its Rs 18,000-crore share buyback from March 9, and it closes today.
The share buyback program has attracted a large number of shareholders. The TCS board in January had approved a proposal to buy back up to 4,00,00,000 Stocks for an amount not exceeding Rs 18,000 crore at Rs 4,500 per share.
Earlier, till Tuesday, 22 crore shares were tendered, 5.5 times what company intends to repurchase.
This buyback program is one of the largest equity buybacks offered in the country under which TCS will buy back 4 crore shares, or 1.08 per cent of its equity. The buyback is being done at Rs 4,500 per share – over 21 per cent premium to current market price. TCS shares were trading marginally higher at Rs 3,706 apiece on the Bombay Stock Exchange.
The last date for receipt of completed Tender Forms and other specified documents including physical share certificates (if and as applicable) by the Registrar is also March 23. The last date of settlement of bids on the stock exchanges is April 1, 2022, TCS had said.
Santosh Meena, Head of Research, Swastika Investmart Ltd, said: "The buyback price is 4500, which is at a 22% premium above CMP of 3700. The entitlement ratio is 1 share for 7 shares held for retail shareholders whereas for the non-retail category it is 1 for 108 held. Based on the current overwhelming response towards buyback from the retail shareholder, approx. acceptance ratio will be between 14% and 15%. Short-term investors must grab this opportunity and tender their shares. Even the long-term shareholders should tender their shares as the buyback is tax-free. Long-term shareholders should repurchase the tendered shares from the open market. For the non tendered shares, investors can hold the shares because of the strong fundamentals of the company and strong tailwinds in the IT Sector."
