TCS' Rs 17,000-cr share buyback to start on Dec 1, close on Dec 7; retail entitlement fixed at 17%

Indian IT major Tata Consultancy Services Ltd (TCS) on Tuesday announced December 1 as the opening date for its Rs 17,000-crore share buyback and December 7 as the closing date.

The IT company plans to repurchase up to 4.09 crore paid-up equity shares at Rs 4,150 apiece for a maximum total value of Rs 17,000 crore. The buyback strategy was revealed on October 11 when it announceds its September quarter results.

"The Company believes that the Buyback is not likely to cause any material impact on the profitability or earnings of the Company except to the extent of reduction in the amount available for investment, which the Company could have otherwise deployed towards generating investment income. Assuming full response to the Buyback, the funds deployed by the Company towards the Buyback would not exceed Rs 17,000 crore, excluding transaction costs, applicable taxes, other incidental and related expenses," said TCS in a stock exchange filing on Tuesday.

Retail entitlement has been fixed at 17% with ratio of buyback being fixed at one equity share for every six equity shares held on the record date, which was November 25, 2023.

Tata Sons Private Limited intends to tender 2.96 crore equity shares and Tata Investment Corporation Limited intends to tender 11,358 shares.

On Tuesday, TCS' scrip on BSE closed 0.5% higher at Rs 3,473.3.

This is the fifth time TCS would be conducting a share buyback programme. The previous four buybacks were also done through the tender offer route. A tender offer buyback is one where the company repurchases shares from existing shareholders at a fixed price.

In January last year, TCS announced a share buyback worth Rs 18,000 crore at Rs 4,500 per share. In December 2020, the IT major announced a buyback worth Rs 16,000 crore at a price of Rs 3,000 per share. The company carried out the other two buybacks, both worth Rs 16,000 crore each, in 2017 and 2018.