TCS is bunching its $7 bn cash reserves to drive payouts to shareholders

The company's cash-distribution plan is one of the primary drivers of its investment strategy rather than returns maximization, Gopinathan said

India’s Tata Consultancy Services Ltd. is bunching Rs 477 billion ($7.1 billion) of its cash reserves in short and long-tenure securities to balance its need for easy liquidity with safety as it looks to make significant payouts to shareholders each year.

Asia’s largest software services provider invested about 53 percent of its reserves in government securities as of March 31, with the rest spread over deposits, mutual funds and corporate paper, according to TCS’s annual report. Investments declined 1.4 percent from the previous financial year’s 484 billion rupees after last year’s share buyback, which the company says was India’s largest.

“We are