The largest information technology (IT) company in India, Tata Consultancy Services (TCS), will start buying back shares worth Rs 18,000 crore today, March 9, and will do so for two weeks, till March 23.
The tcs share price, at Rs 4,500, is 25% more than its most recent BSE settlement price of Rs 3,599.95 on March 8.
The company established two categories:
- a) modest financiers
- b) categorization in general
The buyback ratio for the overall category comprises one equity stock for each of the 108 equity shares held, whereas the ratio for minority shareholders is a single stock for every seven equities shares possessed as of the record date (February 23).
- Who may participate in this repurchase program?
TCS has decided that the record date for determining whether shareholders are eligible for the repurchase will be February 23. This indicates that any shareholders who had TCS shares as of February 23, 2022 will be able to sell such shares back to the business at the ratio that was allocated for that purpose.
Furthermore, a previously filed corporate document states that the owners of TCS, Tata Sons and Tata Investment Corporation (TICL), intend to take part in the buyback offer by submitting shares valued at about Rs 12,993.2 crore.
According to the filing, TICL, which has around 10.23 million shares, plans to present 11,055 shares, while Tata Sons, which has about 266.91 billion shares, offers to offer 2.88 billion shares.
The two businesses will make around Rs 12,993.2 billion at a cost of Rs 4,500 each.
- What took occurred with the most recent TCS share repurchase?
The last TCS buyback offer of Rs 16,000 crore was open from December 18, 2020, to January 1, 2021. Tata Sons has made shares valued at Rs 9,997,500 crore available in this sale. At that time, 3,33,25,118 Tata Sons shares were accepted as part of the buyback offer, and over 5.33 crore equity shares were acquired (offer price was Rs 3,000 per share).
The largest Indian supplier of IT services repurchased shares in 2018 for up to Rs 16 billion, or Rs 2,100 per share. An analogous experiment was conducted in 2017.
- Previous Buybacks
The company’s last repurchase offer, which ran from December 18, 2020 to January 1, 2021, was more than a year ago. During that time, Tata Sons offered shares worth Rs 9,997.5 crore, and the deal was valued at almost Rs 16,000 crore. 3,33,25,118 Tata Sons shares were purchased under the repurchase plan at the time, while over 53,3 million equity shares were purchased at an offer price of Rs 3,000 per share.
TCS was in charge of two buybacks that totaled Rs 16,000 crore in 2017 and 2018. TCS bought back 76.1 million shares in 2018 for Rs 2,100 a share, which was 14% more than the going rate.
There has been a 100% acceptance rate in the last three buybacks. This means that the requests of individuals who want to sell their shares at the buyback price were granted approval. Still, a Sharekhan study indicates that the theoretical retail entitlement ratio is somewhere in the range of 25 to 30 percent.
In summary:
In January 2022, TCS released their earnings for the quarter that concluded in December 2021. To Rs 9,769 crore, the company’s net income climbed by 12.2%. During the reviewed year, its income increased from Rs 42,015 crore to Rs 48,885 crore, a 16.3% increase. The company has also declared a dividend of Rs 7 per share. It seems like investing via 5Paisa in TCS is the most profitable thing to do here.
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