TCS buyback last day: Here's what experts say on tendering shares and more

Today is the last day for IT services major Tata Consultancy Services' (TCS) share buyback offer. The Rs 18,000-crore share buyback opened on March 9 and is set to close on March 23.
 
The ratio of buyback is 1 equity share for every 7 equity shares held on the record date in the reserved category for small shareholders. For general category shareholders, the buyback ratio is 1 for every 108 shares held.
 
Should you tender TCS shares?

Manoj Dalmia, founder and director at Proficient Equities Private Limited, believes that the latest TCS share buyback program seems to be better than the previous ones simply because of the correction in the market.

"The premium of the offer price compared to the current market price was not so much when the buyback was announced. The offer seems to be better due to the recent correction in the market. Investors can take advantage of this by buying shares from the markets and tendering them in the buyback offer," he said.

Anuj Gaur, director at MM Securities, said that IT companies generally used to focus more on dividends than on buybacks.

This is the fourth buyback offer by TCS. If retailers have shares on or before the record date, they may be able to earn a 10-15 per cent return in two months," he said.

"Earlier, companies used to focus more on dividends than buybacks, but the government has started charging a 30 per cent tax according to the slab on dividends, so companies have started giving benefits to their investors through buyback offers. Taxation on buyback profit is lower than dividend taxation," he added.

Ravi Singh, vice president and head of research at Share India, said that short-term investors should also consider this buy back due to high acceptance ratio.

"TCS offers twin benefits to its investors, first in terms of attractive valuations and secondly a leader in the IT industry. The overall sector has a positive outlook in long term well supported by a depreciating rupee which make most of the revenues from the overseas market. We recommend short-term investors also to consider this buyback due to high acceptance ratio from a historical perspective,” he said.