TATA CONSULTANCY SERVICES IS A COMPANY BASED IN MUMBAI, INDIA. A REPURCHASE OFFER FOR RS 18,000 CRORE HAS GOTTEN A LOT OF ATTENTION

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Tata Consultancy Services (TCS) shareholders offered more than 30 crore shares for buyback, which is 7.5 times the offer amount. On Wednesday, the Rs 18,000-crore buyback offer came to an end.

According to stock exchange data, about 30,118,23,32 shares were tendered, compared to a total offer size of four crore shares.

In January, TCS' board of directors authorised a share repurchase proposal at Rs 4,500 per share. Tata Sons, which owns roughly 266.91 crore shares, plans to offer 2.88 crore shares, according to TCS. The repurchase would be offered by Tata Investment Corporation Ltd, which owns 10.2 lakh shares.

At the offer price of Rs 4,500 per share, the two firms may receive around Rs 12,993.2 crore from the transaction. For the quarter ending December 31, 2022, the promoter stake in TCS was 72.19 percent.

TCS stated it will use its free reserves to pay the buybacks when it made the announcement.

As of December 31, 2021, the company's total paid-up share capital and free reserves were Rs 85,599 crore and Rs 94,416 crore, respectively.

The amount of money used for the buyback cannot exceed 25% of the company's total fully paid-up share capital and free reserves.

"The expected acceptance ratio is 12%, which means that if you request 100 shares, the company will consider repurchasing about 12 of them at the Rs 4,500 buyback price." In the past, IT behemoths had a habit of doing so. TCS has made four repurchase offers, according to Anuj Gaur, director of IBBM (MM Securities).

"Retailers who purchased shares on or before the record date could receive a 10-15% return in two months."

Previously, firms prioritised dividends above buybacks. However, because the government has begun charging a 30% tax on dividends based on the slab, corporations have begun to provide incentives to their investors through repurchase offers, according to Gaur.

A buyback is when a business buys its own shares from the market and then extinguishes them. It helps restore surplus capital to shareholders by increasing earnings per share and supporting the stock in down markets.

TCS shares closed marginally higher on the BSE on Wednesday, at Rs 3,708.25.

Meanwhile, profit-taking in banking and financial companies caused the Sensex to reverse its early gains and settle 304 points lower on Wednesday. The rupee lost 24 paise to close at 76.42 against the dollar, reversing earlier advances.

In line with increases in Asian stocks, the 30-share BSE index opened higher and gained further to 58416.56. However, profit-taking by investors in recent winners and sluggish buying at higher levels pulled the index down, which dropped nearly 420 points in the second half to hit the day's low of 57,568.59 points.

The Sensex finished the day at 57684.82, down 304.48 points or 0.53 percent.

The broader NSE Nifty fell 69.85 points, or 0.4 percent, to 17245.65, with 29 equities closing in the red.

 

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