New Delhi: Tata Consultancy Services (TCS) will commence its Rs16,000-crore mega buyback offer from 18 May. The buyback programme, which received shareholder approval last month, will open on 18 May and close on 31 May, the company said in a regulatory filing.
TCS will dispatch the Letter of Offer for the buyback to eligible shareholders on or before May 16, it added. The share buyback, if successful, will be India’s biggest, surpassing Reliance Industries’ 2012 share repurchase of Rs 10,400 crore.
Share buybacks typically improve earnings per share and return surplus cash to shareholders while also supporting share price during periods of sluggish market condition.
The Indian IT companies have been under pressure to return excess cash on their books to shareholders through generous dividends and buybacks. TCS had earlier said that it received suggestions from investors over the need for certainty on dividend policy along with share buyback to distribute the cash.
The Mumbai-based company has a cash pile of Rs 43,169 crore, which is nearly 10% of the company’s market capitalisation. TCS rival, Infosys has also announced its capital allocation policy to return up to Rs 13,000 crore this financial year through dividend and/or buyback.
Earlier this year, Cognizant announced a $3.4 billion share buyback, bowing to pressure from activist investor Elliott Management Corp.
Smaller peer, HCL Technologies has also approved a buyback of up to 3.50 crore shares worth Rs 3,500 crore. The proposed shares under the buyback represent 2.85 percent of the total paid-up capital at Rs 2,850 per equity share.
In February, the board of TCS had approved the proposal to buy back up to 5.61 crore equity shares for an aggregate amount not exceeding Rs 16,000 crore.
In a separate filing, TCS said Vijay Kelkar has ceased to be a Director on the company Board from 14 May, in accordance with the retirement age policy of the company.
Published Date: May 15, 2017 17:16 PM | Updated Date: May 15, 2017 17:16 PM