The company also became the first ever Indian IT company to hit a market capitalization of $100 billion on 23rd April 2018. TCS lately has been performing at a stellar rate which can be witnessed by the growth in its stock price, which has seen a rally of 50% in the last one year vastly outperforming the key equity indices Sensex and Nifty.
10 Mutual Funds Holding Big Percentages of TCS
Here are the 10 mutual funds that hold the highest percentage of TCS stocks. Note, this list is arranged in descending order of percentage held and not the actual value of the investment.
If TCS share price rises or falls, the mutual funds holding a greater percentage of TCS shares will be impacted more.
|Name of Mutual Fund||Percentage of the Asset||Value of Investment (Rs)|
|Tata Digital India Fund||11.69%||9.08 Cr|
|SBI Technology Opportunities Fund||11.50%||8.84 Cr|
|Franklin Infotech Fund||9.33%||18.10 Cr|
|Quantum Long Term Equity Value Fund||6.02%||52.65 Cr|
|Axis Focused 25 Fund||5.97%||183.62 Cr|
|Invesco India Largecap Fund||5.84%||7.66 Cr|
|Axis Long Term Equity Fund||4.91%||792.91 Cr|
|UTI Value Opportunities Fund||4.36%||184.40 Cr|
|Taurus Largecap Equity Fund||4.25%||5.12 Cr|
|Indiabulls Blue Chip Fund||4.10%||41.95 Cr|
TCS Share Price
As of 21st June 2018, the price of TCS was Rs 1,819.35.
What Caused TCS Share Price to Rise?
There a host of factors that have led to the recent ups and downs in the share price of the company. In the fiscal year 2019, there were three main triggers which have led to the movements in the stock.
Here are 3 factors causing the TCS share price to rise in the recent few months.
1. Strong Performance in March Quarter
Firstly, as the company’s March quarter earnings beat the market expectations, leading domestic and foreign brokerages such as Jefferies, JM Financial, Edelweiss, and CLSA raised the target price of the company by up to 28%.
Brokerages reported examples of management commentary of strong growth in retail in FY19 and green shoots in BFSI (banking, financial services, and insurance) as a way of an acceleration in growth going forward.
Therefore, the shares soared on the back of the strong fourth quarter performance and hit a record high on the day of announcement of earnings. The shares posted their biggest single-day gain since April 2012, rallying by 7% to close at Rs 3,412 on the BSE after hitting an all-time high of Rs 3,421.25 intraday.
Also, at the close, the company’s market cap was just shy of the $100 billion mark at $98.9 billion.
2. Issue of Bonus Shares
The second trigger for the company came on the back of the issue of bonus shares.
The company announced on 19th April 2018 that the board had recommended bonus issue in the ratio of one equity share of Re.1 each for every one equity share of Re.1 each held by the shareholders of the company as on record date.
With the announcement, the share price of the company hit a record high of Rs. 3,585, moving up 2.4% on the BSE in an otherwise subdued market after the company fixed June 2, 2018, as the record date for determining the entitlement of members to receive bonus shares in the ratio of 1:1.
However, the share price of the company fell nearly 2 percent after the stock turned ex-bonus on May 31, 2018 (A share is called as “ex-bonus” when a buyer does not get the right to receive the current bonus).
Finally, the company also announced Rs. 16,000 crore (1.99% of the equity share capital) share buyback plan on 11th June 2018.
This share buyback scheme entails 7,61,90,476 equity shares of TCS being bought back by the company for Rs 16,000 crores at Rs. 2,100 per equity share. The company proposed to buy back its equity shares under the tender offer route which means a type of public takeover bid.
Generally, the main reasons why companies go for buyback include:-
- Improved shareholder value through an increase in earnings per share (EPS);
- Boost in share prices as the number of free-floating shares in the market reduces with no change in earnings of the company;
- Tax benefits for the company;
- Excess cash which supports the price of the stock and provides long-term security for investors.
In the case of TCS, the proposed share buyback will be over and above Rs. 29 per share final dividend declared by the company for FY 2018.
This implies that the company will return around Rs 27,100 crore in cash to shareholders during this fiscal year. Post buyback, the number of outstanding shares (also known as free-floating shares) would reduce by 1.99% and return on equity is expected to improve by 5% in FY 2019.
Further, earnings per share is also expected to increase by more than 2% at Rs 77.
Just after the announcement of the share buyback, TCS shares rallied by 2.94% to close at Rs. 1,845. TCS shares closed at Rs. 1,750 a day before the company made the announcement of intended share buyback.
A day later (June 12), the shares closed at Rs. 1,781 on the cheer of announcement, and further at Rs. 1824 on the following day.
TCS today has a market share of 20% of the Indian IT export market, and at the same time growing faster than the market.
Apart from all the positives about its strategy, consistency, and investments, it is also leveraging its scale and presence to increasing its pie in the client account. TCS going forward will be able to take business away from others, maybe some of the tier II companies, who in turn are showing slower growth.
Lastly, today the Indian IT sector looks as a perfect defensive bet for investors given the falling rupee against the dollar, Fed’s stance of interest rate hike, rising fear of trade war giving way to worsening of geopolitical scenario. In this volatile markets, TCS has continued to generate wealth for the investors and most people still believe that the best is yet to come for the company.
Disclaimer: the views expressed here are of the author and do not reflect those of Groww.