TCS Share Buy Back To Start On Dec. 1

IT major Tata Consultancy Services Ltd. (TCS) is set to start its share buyback on December 1. The company intends to repurchase shares worth Rs. 17,0000 crore, which is 1.12% of the total issued and paid-up equity share capital as of September 30, 2023, at a rate of Rs. 4150 per share. The investors can apply for the share buyback until December 7.

The company is planning to repurchase the shares almost at a premium of Rs. 652, given that the shares are currently trading at a price level of Rs. 3,498.40. TCS has clarified that the share buyback will not have any impact on the company”s profitability; however, it may reduce the amount available for investment.

After the buyback, promoter and promoter group companies” holdings in the TCS will increase to 72.41% from the current 72.3%. This is the fifth share buyback the company has been conducting since 2017.

From March 9–23, 2022, the firm bought back 40 million shares at a rate of Rs 4,500 per share, which translates into an aggregate amount of Rs 18,000 crore, according to data available on the stock exchanges. The face value of share is Rs. 1 each.

Companies opt for share buybacks in order to reduce the number of shares in the market and thereby increase the value of the existing shares. In the second quarter of the current fiscal year, TCS posted a consolidated net profit of Rs. 11,342, which is 9% higher compared to the same period in the previous year.

The consolidated revenue increased by 8% to reach Rs. 59692 crores.