TCS sets record date for ₹17,000-cr share buyback

Shares of IT services major Tata Consultancy Services Ltd (TCS) are trading up today after the company fixed November 25 as the record date for its ₹17,000-crore share buyback plan. "The company has fixed Saturday, November 25, 2023, as the Record Date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the Buyback," TCS says in a statement to the stock exchanges.

TCS plans buyback of up to 4,09,63,855 fully paid-up equity shares of face value of ₹1 each at ₹4,150 per equity share for ₹17,000 crore, excluding transaction costs, applicable taxes and other incidental and related expenses. This marks a premium of 18% against the closing share price on Wednesday i.e. November 15, 2023. The buyback will be from the existing shareholders on a proportionate basis under the tender offer route.

The current share price of TCS stands at ₹3,443.9. The stock, which opened a gap up today at ₹3,467, surged to an intra-day high of ₹3,467 on the BSE. The company's m-cap stands at ₹12.6 lakh crore. The share surged 1.76% in the past week; but fell 2.28% in the past month. On a six-month; year-to-date and past-year basis, the stock has seen a 5.60%, 5.50%, and 2.55% rise, respectively.

The pre-buyback shareholding pattern of the company as of October 6, 2023, shows the promoters own a 72.30% stake in the company, while a 12.5% stake is held by foreign portfolio investors. A total of 5.91% stake is owned by insurance companies, while 3.46% is owned by mutual funds and UTI. Only 5.21% of shares of the company are owned by the public.

Before this, TCS had rolled out share buybacks in the years 2022, 2020, 2018 and 2017. The IT major bought back shares worth ₹66,000 crore in these buybacks.

The IT bellwether's consolidated net profit rose 8.7% year-on-year (YoY) to ₹11,342 crore as against ₹10,431 crore in the same period last year. The revenue from operations of the IT major stood at ₹59,692 crore in the September quarter this year, up 10% (YoY) as against ₹55,309 crore in the same period last year.

Tata Consultancy Services (TCS) remains the most valuable brand in India in the year 2023, valued at $42.9 billion, down 6% compared to 2022, according to Kantar BrandZ Top 75 most valuable Indian brands report. Financial services giant HDFC Bank and IT services major Infosys remain in the top three, with the former having a brand value of $33.6 billion (up 3%), while the latter at $24.1 billion(down 17%).