TCS okays Rs 16,000-cr share buyback plan

New Delhi, February 20 

Tata Consultancy Services (TCS) today announced Rs 16,000-crore share buyback — biggest in the Indian capital market, as it looks to return surplus cash to shareholders.

The decision comes at a time when India’s largest software services provider is under pressure of losing revenue from its clients in the US, which accounts for 65% of the $155 billion industry, under President Donald Trump’s protectionist measures.

TCS said in a stock exchange filing that its Board approved the buyback of up to 5.61 crore shares, or 2.85% of its share capital, at Rs 2,850 apiece.

The share buyback, if successful, will be India’s biggest, surpassing Reliance Industries’ 2012 share repurchase of Rs 10,400 crore.

TCS shares rallied 4.08% to close at Rs 2,506.50 on the BSE, the highest closing price in five months.

“TCS Board of Directors has approved a proposal to buy back up to 5.61 crore equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore,” the company said in the filing. The Board meeting is the last for N Chandrasekaran as TCS chief executive before he takes over as chairman of parent Tata Sons Ltd, which controls 73.3% of the software developer, tomorrow.

Chandrasekaran had last week stated the company had received suggestions from investors over the need for certainty on dividend policy along with share buyback to distribute large amount of cash to its shareholders.

TCS has a cash pile of Rs 43,169 crore, which is nearly 10% of the company’s market capitalisation.

Earlier this month, Cognizant Technology Solutions Corp announced $3.4 billion share buyback, bowing to pressure from activist investor Elliott Management Corp. Share buybacks typically improve earnings per share and return surplus cash to shareholders while also supporting share price during periods of sluggish market condition.

The buyback is subject to approval of the members by means of a special resolution through a postal ballot, it said.

The public announcement setting out the process, timelines and other requisite details will be released in due course in accordance with the Buyback Regulations.

While there are reports that Infosys may consider a Rs 12,000-crore share buyback, the company said it will take a decision on buyback at an “appropriate time”. — PTI

Chandra to take charge of Tata Group today

Tata Group will enter a new era on Tuesday as N Chandrasekaran takes over as chief, hoping to put behind an acrimonious boardroom battle that saw the ouster of Cyrus Mistry as Tata Sons Chairman.

Popularly known as ‘Chandra’, the 54-year-old will be the first non-Parsi chairman of the 150-year old Tata Group.

A man known for making India’s largest software exporter TCS what it is today, Chandrasekaran has his task cut out as the new Chairman of Tata Sons —the promoter firm of many of the operating Tata group firms. PTI