TCS share price in focus as buyback opens today; should you tender your shares?
Tata Consultancy Services (TCS) share price will be in focus on Friday as the company’s share buyback programme opens today. TCS share buyback worth ₹17,000 crore will begin on December 1 and close on December 7. This will be the fifth share buyback from India’s largest IT services company.
TCS will buy back nearly 4.2 crore equity shares or 1.1% of the outstanding equity through a tender offer route. The company has set the buyback price at ₹4,150, which is over 18% higher from Thursday’s closing price of ₹3,493.40 on the BSE. The record date for TCS buyback was November 25.
Small shareholders, which are categorized as those with investments totaling less than ₹2 lakh, have been assigned an entitlement ratio of 1 equity share for every 6 shares held as of the record date. This ratio corresponds to approximately 17%. Read here: TCS announces share buyback dates, fixes retail entitlement ratio at 17%; Details here For other qualifying shareholders, the entitlement ratio is set at 2 shares for every 209 shares held.
If all shareholders exercise their buyback entitlement to the full extent, the promoters’ combined shareholding will rise to 72.41%, up from the current 72.3%. Tata Sons and Tata Investment Corporation, two holding companies within the Tata Group, have indicated their intention to take part in the buyback, potentially tendering a combined maximum of 2,96,15,048 equity shares. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Analysts believe short term investors could tender their TCS shares in the buyback to take the benefit of the premium buyback price.
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