TCS announces up to $2.4 billion share buyback | Reuters

By Sankalp Phartiyal and Abhirup Roy | MUMBAI MUMBAI India's top software services exporter Tata Consultancy Services(TCS) will buy back shares worth up to 160 billion rupees ($2.4 billion), it said on Monday, adding to pressure on similarly cash-rich rival Infosys to follow suit.The TCS board has approved the buyback of up to 56.1 million shares at 2,850 rupees apiece, the company said in a stock exchange filing, returning cash to shareholders at a substantial premium to Friday's closing price of 2,407.90 rupees.Its offer is above the record price of 2,839.70 rupees hit in October 2014 and sent TCS shares up 3.9 percent on Monday.Some former executives at Infosys, meanwhile, have been clamouring for a buyback as friction between the founders of India's second-biggest software services company and its board has spilled into the public domain.Analysts have largely agreed with those calls, saying that stock repurchases can attract investors at a time when India's $150 billion IT sector faces an uncertain outlook as immigration reforms in the United States cast a shadow over its ability to service clients in its biggest market.Former Infosys chief financial officer V. Balakrishnan on Monday urged his former company to follow TCS with a buyback. 'If you look at the IT services industry, the growth is slowing down and they are all transforming from growth stocks to value stocks,' Balakrishnan told Reuters.'When you become a value stock it makes lot of sense to return money to shareholders, and a buyback is the most tax-efficient way.'TCS, part of the salt-to-software Tata conglomerate, had total cash and investments of 431.69 billion rupees at Dec

Reuters February 20, 2017 21:45:06 IST
TCS announces up to $2.4 billion share buyback
| Reuters

TCS announces up to 24 billion share buyback
 Reuters

By Sankalp Phartiyal and Abhirup Roy
| MUMBAI

MUMBAI India's top software services exporter Tata Consultancy Services(TCS) will buy back shares worth up to 160 billion rupees ($2.4 billion), it said on Monday, adding to pressure on similarly cash-rich rival Infosys to follow suit.The TCS board has approved the buyback of up to 56.1 million shares at 2,850 rupees apiece, the company said in a stock exchange filing, returning cash to shareholders at a substantial premium to Friday's closing price of 2,407.90 rupees.Its offer is above the record price of 2,839.70 rupees hit in October 2014 and sent TCS shares up 3.9 percent on Monday.Some former executives at Infosys, meanwhile, have been clamouring for a buyback as friction between the founders of India's second-biggest software services company and its board has spilled into the public domain.Analysts have largely agreed with those calls, saying that stock repurchases can attract investors at a time when India's $150 billion IT sector faces an uncertain outlook as immigration reforms in the United States cast a shadow over its ability to service clients in its biggest market.Former Infosys chief financial officer V. Balakrishnan on Monday urged his former company to follow TCS with a buyback.

"If you look at the IT services industry, the growth is slowing down and they are all transforming from growth stocks to value stocks," Balakrishnan told Reuters."When you become a value stock it makes lot of sense to return money to shareholders, and a buyback is the most tax-efficient way."TCS, part of the salt-to-software Tata conglomerate, had total cash and investments of 431.69 billion rupees at Dec. 31. Infosys had cash of 356.97 billion rupees in December.

Wipro, a smaller IT business with cash reserves of 331.55 billion rupees, has also approved a proposal for a share buyback of up to 25 billion rupees."Infosys and Wipro are sitting on huge piles of cash, some part of which they should return to the shareholders," said Neeraj Dewan, director at Quantum Securities. "They (Infosys and Wipro) are not able to do anything with the cash right now and they should take a cue from what TCS has done."

Separately, TCS named V Ramakrishnan as the company's new chief financial officer. Former CFO Rajesh Gopinathan was promoted to chief executive in January to fill the vacancy created by Natarajan Chandrasekaran's elevation to chairman of parent Tata Sons after last year's ousting of Cyrus Mistry in a boardroom coup.($1 = 66.9650 rupees) (Additional reporting by Devidutta Tripathy; Editing by David Goodman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.