TCS announces share buyback dates, retail entitlement at 17%

Investors can offer their shares to the company at a rate of Rs 4,150 per share.

For small shareholders, defined as those with investments totalling less than Rs 2 lakh, the entitlement ratio is 1 equity share for every 6 shares held as of the record date, which was November 25, corresponding to around 17%.

Other qualifying shareholders have an entitlement ratio of 2 shares for every 209 shares held.

The buyback price of Rs 4,150 represents a 20% premium over Friday's closing price of Rs 3,457.60 on the BSE. Throughout the day, the stock price traded 0.6% higher at Rs 3,478.80.

TCS expects that the buyback will lead to an increase in its standalone EPS from Rs 58.52 to Rs 59.18, and the net worth is projected to rise from 49.89% to 62.56%.

In the event that all shareholders fully exercise their buyback entitlement, the combined shareholding of the promoters is anticipated to increase marginally to 72.41%, compared to the current 72.3%.

Tata Sons and Tata Investment Corporation, both holding companies under the Tata Group, have expressed their intent to participate in the buyback, potentially offering a combined maximum of 2,96,15,048 equity shares.

The total buyback initiative covers 4,09,63,855 shares. The technology giant intends to finance the buyback through existing surplus funds and/or internal accruals.

"This is in furtherance of our letter no. TCS/BM/162/SE/2023-24 dated October 11, 2023 and letter no. TCS/BB/SE/201/2023-24 dated November 15, 2023, informing the decision of the board of directors and the members of the Company, respectively, to buyback up to 4,09,63,855 (Four crore nine lakh sixty three thousand eight hundred and fifty five) fully paid-up equity shares of face value of Re 1 each at Rs 4,150 (Rupees four thousand one hundred and fifty only) per equity share for an aggregate amount not exceeding Rs 17,000 crore (Rupees seventeen thousand crore only) excluding transaction costs, applicable taxes and other incidental and related expenses (“Buyback")," TCS said in an exchange filing.