HDFC CEO EYES REVISION OF CORP GOVERNANCE NORMS

IT bellwether TCS on Monday approved a proposal to buy back 5.6 crore shares from the public for an aggregate amount not exceeding `16,000 crore.

The company has proposed a base price of `2,850 per share for the buy back, which is at a substantial 13 per cent premium to its Monday’s closing price of `2,506.50.

The buy-back size constitutes 2.85 per cent of the total paid-up equity share capital of the company.

“The buyback is proposed to be made from the shareholders of the company on a proportionate basis under the tender offer route using the stock exchange mechanism in accordance with the provisions contained in the Sebi (Buy Back of Securities) Regulations, 1998 and the Companies The need to revise the code of conduct and prescribe new guidelines following the issues of corporate governance at the Tata Group and Infosys considered the epitome of adhering to best corporate governance practices was necessary.

Keki Mistry, vice- Act, 2013 and rules made thereunder. The buy-back size does not include any expenses incurred or to be incurred for the buyback like filing fees, advisory fees, public announcement publication expenses, printing and dispatch expenses, chairman and CEO, HDFC and chairman, CII National Council on corporate governance said there was need for effectiveness of board processes; independence and quality of independent directors; risk management as key guidelines for effectiveness of what he calls the nerve centres of corporate governance – the Board. and other incidental and related expenses,” TCS said in a statement after its board approved the proposal.

The announcement triggered strong buying interest in the shares of India’s largest software service provider with the stock ending the day up over 4 per cent on the BSE.

Buy-back allows a company to reduce its overall cost of capital and increase the earnings per share.

This is the second IT major to initiate a buy back to enhance shareholders value after the Nasdaq listed Cognizant Technology Solutions announced to return $3.4 billion to shareholders over the next two years, through share repurchases and dividends.

Earlier, the market was also abuzz with speculation that Infosys, India’s second largest software service provider would announce a similar plan after V. Balakrishnan, the company’s former CFO demanded a share buyback to protect the interest of investors.

TCS has a cash balance of `43,100 crore on its books as on December 31.