Rs 16,000 cr buyback plan of TCS approved at Rs 3,000 per share

NEW DELHI: Tata Consultancy Services (TCS) on Wednesday announced a mega-Rs 16,000 crore buyback plan at Rs 3,000 per equity share. In 2017 and 2018 too, TCS had undertaken buyback offers of similar sizes.

“...the Board of Directors of the company at its meeting held today has approved a proposal to buyback up to 5,33,33,333 equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore, being 1.42 per cent of the total paid-up equity share capital at Rs 3,000 per equity share,” TCS said in a regulatory filing on Wednesday.

The buyback will be conducted via a tender offer route using the stock exchange mechanism, it added. The buyback offer is subject to the approval of the members by means of a special resolution through a postal ballot, the filing said.

A public announcement setting out the process, timelines and other requisite details will be released in due course following the buyback regulations, it added.

Meanwhile, smaller rival Wipro has also announced that its Board will consider a buyback plan on October 13. However, no other details were provided.

The TCS’ offer price of Rs 3,000 per equity share is 9.6 per cent higher than the stock’s closing at Rs 2,737.40 on BSE on Wednesday. In 2018, TCS had undertaken a share buyback plan worth up to Rs 16,000 crore, offering Rs 2,100 per equity share and entailing up to 7.61 crore shares. In 2017, TCS had conducted a similar share purchase exercise. The company had said its buyback offer was part of its long-term capital allocation policy of returning excess cash to shareholders.

Salary hikes from Oct 1

Also, the company will roll out salary hikes effective October 1. TCS’ consolidated headcount stood at 4,53,540 as of September 30, 2020. “We want to thank all TCSers for the incredible resilience they have shown during these trying times. We are happy to announce that we will be rolling out salary increases, effective October 1st,” TCS Global Head, HR, Milind Lakkad said, adding it has begun onboarding freshers, and increased its recruitment globally in the September quarter in anticipation of the growth trajectory it sees ahead.

In a separate filing, TCS said its CFO V Ramakrishnan would be retiring from the company on April 30, 2021. Based on the recommendations of the Nomination and Remuneration Committee, the Board has appointed Samir Seksaria as CFO Designate. He would take over from Ramakrishnan as CFO, effective May 1, 2021. Seksaria, VP, Finance, has been with TCS since 1999.

The TCS’ offer price of Rs 3,000 per equity share is 9.6 per cent higher than the stock’s closing at Rs 2,737.40 on BSE on Wednesday