Tata Sons, TICL to participate in TCS mega buyback offer

Tata Consultancy Services promoters - Tata Sons and Tata Investment Corporation Ltd (TICL) - intend to participate in the IT services major's Rs 18,000 crore buyback offer by tendering shares worth about Rs 12,993.2 crore.

On Wednesday, the TCS board approved an up to Rs 18,000 crore buyback offer entailing 4 crore shares at Rs 4,500 apiece.

According to a postal ballot notice by the company, Tata Sons and TICL intend to participate in the buyback offer.

Tata Sons, which holds about 266.91 crore shares, intends to tender 2.88 crore shares, while TICL (which holds 10,23,685 shares) intends to tender 11,055 shares, it added.

At Rs 4,500 apiece, the two entities stand to rake in about Rs 12,993.2 crore.

TCS is seeking shareholder approval by way of special resolution for buyback of equity shares of the company.

The remote e-voting period will commence from January 14, 2022 and end on February 12, 2022.

The results of the postal ballot will be announced on February 15, 2022, it added.

The previous buyback of Tata Consultancy Services (TCS), worth about Rs 16,000 crore, had opened on December 18, 2020, and closed on January 1, 2021, in which group holding firm Tata Sons had tendered shares worth Rs 9,997.5 crore.

Over 5.33 crore equity shares were bought at that time  (offer price was Rs 3,000 apiece) and out of the total, Tata Sons' 3,33,25,118 shares were accepted under the buyback offer.

In 2018, India's largest IT services firm repurchased shares worth up to Rs 16,000 crore at Rs 2,100 apiece. A similar exercise was conducted in 2017 as well.

As per the postal ballot detailed in Thursday's stock exchange filing, promoter companies held 72.19 per cent stake in TCS as on January 12, 2022.

It added that the offer price of Rs 4,500 per share represents a premium of 18.21 per cent and 18.19 per cent over the closing price of the equity share on BSE and NSE, respectively, as on January 6, 2022.

The postal ballot said the current buyback is “in line with the company's shareholder-friendly capital allocation practices of returning excess cash to  shareholders, thereby increasing shareholder value in the longer term, and improving the "Return on Equity”.

The buyback, subject to the regulatory consents and approvals, if any, is proposed to be completed within 12 months from the date of passing of the special resolution by the shareholders.

Photograph: PTI Photo