Should investors avail of TCS buyback offer? Kunj Bansal explains
Kunj Bansal, National Institute of Securities Markets (NISM), says “there is a lot of money available in the market and in such a scenario even not so good companies with expensive valuation gets subscribed multiple times, leave aside good companies getting expensive valuations and getting oversubscribed. As a result one does not get any allotment in the IPOs and so instead, one should focus on the valuation at which one is comfortable for entering into such companies post listing.”
TCS buyback has opened, the Rs 17,000-crore buyback and it is coming in at a premium of almost 20-25% from the current market price. Would you recommend people to tender their shares?
These days the buybacks have become synonymous with dividends.
What earlier companies used to give as dividend now they have started preferring buybacks. In between, there was a tax arbitrage. I do not particularly have a view on this stock but it comes back to the horizon of investing.
As long as you are comfortable with the medium- to long-term investment horizon and you are comfortable with the sectors and companies' financials, then there is no reason for anybody to kind of look at exit. One should continue to hold on to good quality stocks.
Curious to know whether you have been a subscriber in any of these IPOs of late?
IPOs these days have become quite popular because of a lot of money being available in the market and irrespective of valuation which we have seen in quite a lot of cases, there are multiple cases of companies with not so good financials coming out with expensive valuations. The company with good financials is also coming out with expensive valuations.
