The company plans to purchase almost 4.2 crore shares or 1.1% of the outstanding equity at ₹4,150 per share through a tender offer route.
Tata Consultancy Services (TCS), India’s largest technology services company, is launching its fifth share buyback on December 1. The buyback, worth ₹17,000 crore, will close on December 7. TCS is planning to purchase over 4.2 crore shares, equivalent to 1.1% of the outstanding equity, at a price of ₹4,150 per share – an 18% premium compared to the Wednesday’s closing price for TCS. The buyback will be executed through the tender offer route, which means that TCS will repurchase all their shares at a pre-determined price of ₹4,150.
This buyback provides an opportunity for shareholders to sell their shares at a premium, and it also demonstrates TCS’s commitment to enhancing shareholder value. Don’t miss out on this excellent opportunity to profit from your investment in TCS.
But What Does It Mean For The Small Shareholder?
Retail shareholders with investments under ₹2 lakh have an entitlement ratio of 1 equity share for every 6 shares held as of November 25. If all retail shares participate, the acceptance ratio will be 17% at a price of ₹4,150.
Should The Retail Shareholder Participate?
To qualify as a retail shareholder, your total investment in TCS cannot exceed ₹2 lakh, which is equivalent to around 57 shares. For instance, if you had bought 100 shares of TCS at ₹3,450 on the ex-buyback date, you would be considered a retail shareholder.
TCS’s share price has typically declined in the month following the buyback closure, except in 2020. Retail shareholders may not gain or lose much from participating in the buyback.
