TCS to buy back shares worth RS 16,000 crore

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TCS to buy back shares worth RS 16,000 crore

A big news coming from India’s largets IT farm TCS (Tata Consultancy Services). TCS to buy back shares worth Rs 16,000 crore.

Board of Directors of TCS has approved a proposal to buy back up to 7.61 crore equity shares of the company.

India’s largest software exporter offered shareholders a premium of 15% on its scrip. The buyback is like as follows. At Rs 2,100 per equity share, entails up to 7.61 crore shares or 1.99 percent of the total paid up equity share capital.

This is very similar to last year. Last year, TCS had undertaken an Rs 16,000-crore mega buyback offer, entailing 5.61 crore shares at a price of Rs 2,850 per scrip.

The company expects to complete buyback by the end of the second quarter,” said chairman N Chandrasekaran.

In recent years this has spurred shareholders to demand a greater share of the cash pie.

Data shows that clients are spending more on newer areas like cloud, digital and analytics and. Indian firms now earn around 25% of their revenue from newer services.

Urmil Shah of brokerage IDBI Capital said he had factored in a payout of ₹23,900 crore in fiscal 2019 from TCS.

According to economic times, India’s second-largest software services company Infosys has also committed to returning 70% of the free cash flow in a year and an additional $2 billion from its balance sheet to shareholders in fiscal 2019.

Conclusion

TCS to buy back shares worth RS 16,000 crore. The main intention is “to keep capital return close to 80-100 percent of annual free cash flow” said TCS CEO Rajesh Gopinathan.

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