TCS stock rises as IT major announces date for Rs 17,000-crore share buyback

Shares of Tata Consultancy Services (TCS) opened with gains on November 29 after the company announced dates for share buyback. The Rs 17,000-crore buyback will start on December 1 and end on December 7. The information technology (IT) major plans to repurchase up to 4.09 crore equity shares with a face value of Re 1 at a price of Rs 4,150 per share.

The buyback represents 1.12 percent of the total issued and paid-up equity share capital of TCS as of September 30, 2023.

At 9:17 am, TCS were trading half a percent higher at Rs 3,485.95 on the National Stock Exchange (NSE). So far this year, the stock has risen around 6 percent, underperforming benchmark Nifty 50 which has risen 8 percent during this time.

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JM Financial Services Ltd. will be the broker for the buyback, and the BSE will be the designated stock exchange. The buyback is not likely to cause any material impact on profitability or earnings, except to the extent of the reduction in the amount available for investment, which the company could have otherwise deployed towards generating investment income, TCS said in a regulatory filing.

Post the buyback, promoter and promoter group shareholding in the company will change from 72.3 percent currently to 72.41 percent.

Also Read | TCS share buyback to start on December 1

This will be TCS’ fifth share buyback. The company bought back its shares worth 16,000 crore for the first time in 2017 at an 18 percent premium to the prevailing price.

This was followed by two buybacks of Rs 16,000 crore each in June 2018 and October 2020, at an 18 and 10 percent premium. Its last buyback was in January last year when the company bought shares worth Rs 18,000 crore at a premium of 17 percent.

Meanwhile, Tata Consultancy Services (TCS) has been ordered to pay $210 million to DXC Technology by a Texas court in another trade-secret case blow. The case was filed by Computer Sciences Corporation (CSC), which became DXC Technology after a merger with HPE’s enterprise services business.

Also Read | TCS told to pay $210 million to DXC Technology in another trade-secret case in US

A jury in Dallas, Texas federal court, found TCS guilty of misusing confidential information about DXC’s Vantage-One and CyberLife software for managing life insurance and annuity policies to create its own platform. “TCS respectfully disagrees with the jury’s advisory verdict,” a TCS spokesperson said, denying the charges.

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