All You Need to Know About TCS BuyBack

29 February 2024
3 min read
All You Need to Know About TCS BuyBack
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One of India’s leading IT players, Tata Consultancy Services (TCS), announced its share buyback plan. The record date for the same is fixed on November 25, 2023. This is for identifying the eligible shareholders whose shares will be bought back by the company.

The TCS Buyback of Rs 17000 crores, which was approved by the board of directors at the meeting, was held on October 11, 2023.

It is noteworthy to remember that the board of directors of TCS approved the buyback by the Company of its fully paid-up equity shares having a face value of Rs 1 each equity share at a price of Rs 4150 per Equity Share and for an aggregate amount not surpassing Rs 17000 crores from the shareholders.

TCS Buyback 2023 Dates and Details

Buyback Type

Tender Offer

Buyback Record Date

November 25, 2023

Date of Board Meeting approving the proposal

October 11, 2023

Date of Public Announcement

October 11, 2023

Buyback Offer Amount

Rs  17,000 Cr

Buyback Offer Size

1.12%

Buyback Number of Shares

4,09,63,855

FV

1

Buyback Price

Rs  4,150 Per Equity Share

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How to Apply for TCS Buyback on Groww

Here’s how to apply for TCS buyback on Groww website-

Step 1: You can search for the TCS buyback in the search option on the Groww website.

Alternatively, an option to apply is also available in our Help and Support section.

Step 2: After you land on the TCS buyback screen, enter the number of shares you are eligible for and click on sell.

Step 3: The next screen will give you a detailed snapshot of your TCS buyback application.

You may have to complete your e-DIS verification before you sell. As per a SEBI rule, you can only sell your stocks if your holdings have been verified.

Advantages of TCS Buyback

  • The buybacks are part of TCS’s long-term principal allotment policy of returning excess cash back to its shareholders. And reducing the number of shares traded in the open market.
  • Buybacks generally indicate that the company has set aside an emergency corpus and has surplus cash, wherein the business’s possibility of an economic downturn is less.
  • Boosts the investor’s confidence in the company since it adds value to their capital.
  • Excellent opportunity for TCS shareholders who want to make short-term gains.
  • Buyback reduces the number of shares being traded in the market; this may drive the demand up, increasing the stock price.
  • With fewer shares being traded in the market, the company’s Earnings Per Share (EPS) may rise.

Disadvantages of TCS Buyback

  • Due to the company’s gigantic size and market capitalization, the buyback may have a marginal effect. It may not provide an uptick to the stock, already one of India’s most expensively valued IT stocks.
  • While the buyback may lead to short-term profit, investors might miss out on the long-term gains, with TCS projecting strong growth in an environment where the demand for tech and IT services is at an all-time high.
  • An upswing in the EPS may make the share prices artificially inflated for a small period of time.
  • The funds being used for the buyback could have been used for other investments. It may have been productive and profitable.

To read the RA disclaimer, please click here.
Research Analyst - Aakash Baid

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Groww Invest Tech Pvt. Ltd. (Formerly known as Nextbillion Technology Pvt. Ltd) Ltd. do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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