TCS to Conclude Rs 17,000 Crore Share Buyback Offer Today

7 Dec 2023 , 10:21 AM

Tata Consultancy Services Ltd (TCS), one of the leading IT majors, is set to conclude its Rs 17,000 crore share buyback offer on Thursday. The offer, which commenced on December 1, has garnered substantial interest from investors.

Key Highlights:

Buyback Size: The buyback offer, with a size of up to 4,09,63,855 shares, has witnessed a subscription for 21,74,43,695 shares as of the December 6 closing, according to BSE data.

Offer Price: The offer price for the buyback was fixed at Rs 4,150 per share, representing a 15% premium over TCS’s closing price of Rs 3,603.35 on the day preceding the offer.

Participation Criteria: Small shareholders with a maximum holding of 57 TCS shares as of the record date (November 25) are eligible to participate in the share buyback. The retail shareholders have a reserved quota of 15%.

Buyback Entitlement Ratio: TCS has suggested a buyback entitlement ratio of 17% for small investors. Retail shareholders, categorized with investments less than ₹2 lakh, have an entitlement ratio of 1 equity share for every six shares held as of the record date.

Acceptance Ratio: If all retail shares participate, the acceptance ratio is set at 17%, meaning 17 shares will be accepted for every 100 tendered at the offer price of ₹4,150. The acceptance ratio may vary based on the participation of small shareholders.

For Other Qualifying Shareholders: The entitlement ratio for other qualifying or general shareholders is set at two shares for every 209 held.

TCS’s Payout Policy: TCS has a policy of returning 80-100% of free cash flow (FCF) to company shareholders. In FY23, its total payout reached 110% of FCF. The share buyback in 2022 was Rs 18,000 crore, announced at a higher stock price of Rs 4,500 per share.

Tata Consultancy Services was trading at Rs 3608 on NSE, 0.12% higher from the previous close of Rs 3,604.1 at 10.20 AM on December 7, 2023.