TCS' share buyback opens tomorrow. What investors need to know
Premium- TCS' share buyback offer will open on Wednesday, March 9 2022 and close on March 23
Tata Consultancy Services (TCS) board in January approved a proposal to buy back upto 4,00,00,000 Stocks for an amount not exceeding ₹18,000 crore at ₹4,500 per share. TCS' share buyback offer will open on March 9 and close on March 23. Shares of TCS were trading nearly 3% higher at ₹3,587 apiece on the BSE in Tuesday's deals.
The ratio of buyback will be "1 equity share for every 7 equity shares held on the record date," TCS said that in the reserved category for small shareholders. Whereas, in the general category for all other eligible shareholders, the ratio of buyback will be 1 for every 108 equity shares held on the record date.
The IT giant had fixed February 23,2022, as the record date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in TCS' share buyback.
TCS shares on January 12, 2022 closed at ₹3,857 which means that the buy-back to be executed at a premium of ₹643 or 16.6% from the last closing stock price. The company had also announced a dividend of ₹7 with record date of January 20.
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 said.
This is TCS' fourth and biggest buyback in the past 5 years. The previous buyback of the TCS, worth about ₹16,000 crore, had opened on December 18, 2020, and closed on January 1, 2021.
A share buyback, also known as share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
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