TCS to consider buyback of shares in board meeting on October 11

The last instance when TCS proposed a buyback plan was in March 2022. The buyback share price was Rs 4,500 per share

Tata Consultancy Services (TCS), India’s largest IT services player, today announced that the company will consider a proposal for buyback of equity shares, at the meeting to be held on October 11, 2023.

“Pursuant to Regulation 29(1)(b) of the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that the Board of Directors will consider a proposal for buyback of equity shares of the Company, at its meeting to be held on October 11, 2023,” said the company in a regulatory filing.

The last time TCS came up with a buyback plan was in 2022 March. The buyback share price per share was Rs 4,500 with a total buyback size of Rs 18,000 crore. The company completed its buyback programme between March 9 to March 23.  

According to a note from IIFL Alternative Research, it expects TCS buyback to be under the tender offer route and size to be in the range of Rs 18,000 crore to Rs 20,000 crore.

“Buyback price shall be in the range of Rs 4,300-4,500 going by the past history (approx premium from announcement date),” said the note from IIFL. TCS’ stock price was at Rs 3,620 per share at the end of the trading day, up 0.87 per cent from the previous day’s close.

Prior to this TCS has carried out buybacks in 2020, 2018 and 2017 and repurchased shares worth Rs 16,000 crore each.

Under the Sebi regulations, the maximum limit for a buyback is 25 per cent or less of the paid up capital and free reserves in that financial year. 

At the end of March 31, 2023 TCS's paid up capital and free reserves (together) was in excess of Rs 62,000 crore, while it's cash and cash equivalents stood at around Rs 35,000 crore.

For the quarter ended June 30, 2023 (Q1, FY24) TCS reported net cash from operations at Rs 11,353 crore, which is 102.5 per cent of net income.

TCS past buybacks

Year

Size (Rs cr)

Date of announcement

Buyback prize

2017

16,000

15-Feb-2017

Rs 1,425

2018

16,000

12-June—2018

Rs 2,100

2020

16,000

5-Oct- 2020

Rs 3,000

2022

18,000

7-Jan- 2022

Rs 4,500

 Source: IIFL Alternative Research