TCS Rs 18,000 crore buyback subscribed 5.5 times a day before close

Tata group flagship firm is buying back 40 mn shares, or 1.08% of its equity at Rs 4,500 a share. That's a premium of over 21% to CMP

The Rs 18,000-crore share buyback programme of Tata Consultancy Services, India’s second-most valuable firm, has drawn a large number of shareholders.

On Tuesday, 220 million shares were tendered,  5.5 times the company intends to repurchase. The Tata group flagship firm will buy back 40 million shares, or 1.08 per cent of its equity. The buyback is being done at Rs 4,500 per share—over 21 per cent premium to current market price. Shares of TCS last closed at Rs 3,701. The tender route buyback, which commenced on March 9, ends tomorrow.

As per an analysis done by Edelweiss Alternative Research, the acceptance ratio for retail investors could be 14.3 per cent. In other words, one share could get accepted in the buyback for every 7 shares tendered. For non-retail investors, only one share could get accepted for every 108 shares tendered.

The acceptance ratio is lower than previous buybacks done by TCS.

In 2020, TCS did a Rs 16,000-crore buyback where the acceptance ratio was 100 per cent for retail and 10 per cent for non-retail investors, as per an Edelweiss study.