Street signs: Market uptrend intact, opportunity in TCS buyback, and more

Several brokerages are advising their retail clients to buy shares of TCS to benefit from the arbitrage opportunity created by its Rs 16,000-crore share repurchase programme

Market uptrend intact, say analysts

Rising Covid-19 infections globally and selling pressure in Reliance Industries and banking stocks led to some turbulence last week in the markets. However, technical analysts believe the bulls are still firmly in charge and the benchmark Nifty could even surpass 13,500. “The near-term uptrend status remains intact and upside momentum is expected to continue after this small dip in the market. A decisive and sustainable move above 13,000 levels (in Nifty) could open next upside targets of 13,500-13,600 in the near term. Immediate supports to be watched at 12,680-12,730 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. The Nifty on Friday closed at 12,859.
 

Sundar Sethuraman

Arbitrage opportunity in TCS buyback

Several brokerages are advising their retail clients to buy shares of Tata Consultancy Services (TCS) to benefit from the arbitrage opportunity created by its Rs 16,000-crore share repurchase programme. The buyback price set by the company is Rs 3,000 per share, a premium of 13 per cent to TCS stock's last close of Rs 2,660. “The acceptance ratio for retail investors could be around 40 per cent. A gain in excess of 5 per cent is on the table for someone entering at current levels,” said an analyst. The ex-date for the buyback in November 26. In other words, investors who will have TCS shares in their demat account by this date will be eligible to participate in the buyback. However, if the acceptance ratio works out to be lower and if TCS shares drop in the secondary markets, the bets could go awry. 
 

Samie Modak

What’s in a name 

Shares of Tanla Platforms, formerly Tanla Solutions, hit 5-per-cent upper circuit for the sixth consecutive trading session. On a year-to-date basis, the stock is up nearly 7x. Some of the positive triggers for the stock have been inclusion in the MSCI India Small cap index, investments by two private equity firms and improving business outlook. A cloud communications provider based in Hyderabad, the company posted good performance for the September 2020 quarter. However, an analyst has an interesting take on this. “Companies with Platforms in their name have done well in 2020,” he said, referring to Tanla Platforms and Jio Platforms. “I won’t be surprised if more companies go for a name change to include the word ‘platforms’ in them,” he added.

Samie Modak