Tata Sons to be part of TCS share buyback

Tata Consultancy Services has said its promoter Tata Sons will be participating in the proposed share buyback initiative, in an exchange filing.

“We would like to inform you that the Promoter and Promoter group of the company have communicated the intention to participate in the proposed buyback,” said the company in a statement.

The IT firm had previously announced plans to buyback up to 76 million equity shares at ~2,100 per share for an amount not exceeding ~160 billion. Tata Sons had added over ~102.78 billion to its coffers from the previous buyback in FY18.

This is the second time the software major is offering to buy back its shares after it bought 56.1 million shares in April 2017 for ~160 billion at ~2,850 per share. The buyback had seen a sound response, with a subscription of 221.39 per cent, or bids coming in for 124 million shares as against 56.1 million shares on offer.

The current buyback does not include expenses incurred for buyback. Apart from buying back shares, TCS gifted its investors with 1:1 bonus shares and a total dividend of ~50 per share for FY18, which amounts to a record 5,000 per cent per annum.

Last year’s buyback was much in line with buybacks from peers like Cognizant, HCL Technologies, and Infosys amid a slowdown in the sector. Infosys came out with an offer last year to buy back ~130 billion of shares. Wipro had also bought back ~110 billion of shares last year.

The TCS management had informed that the buyback would be complete by the second quarter of the current fiscal (September).