Tata Consultancy Services has announced the dates of mega ₹18,000 crore buyback and the offer will open on 9 March.
The window will close on 23 March. The buyback offer will be undertaken at 17% premium (from the announced date) or ₹4,500 per share.
The company has fixed February 23, 2022, as the record date to determine the shareholders who will be eligible for the buyback.
The IT giant's promoters Tata Sons and TICL will participate in the buyback offer.
Tata Sons holds about 266.91 crore shares in the company and it intends to tender 2.88 crore shares for the buyback, while TICL, which holds 10,23,685 shares, offered to tender 11,055 shares.
At ₹4,500 apiece, the both Tata Sons and TICL stand to gain about ₹12,993 crore. TCS is seeking shareholder approval by way of special resolution for buyback of equity shares of the company.
This is TCS' fourth buyback since 2017 and first for any company in the current calendar year. The company has approved share buybacks worth ₹16,000 crore each in 2017, 2018 and 2020.
Share buyback, or share repurchase, is when a company buys back its own shares from investors or stakeholders. It can be seen as an alternative, tax-efficient way to return money to shareholders.
uybacks are attractive in tax terms even after considering the 10% tax on long term capital gains (LTCG).
Usually, companies go for share buyback if it wishes to increase demand in the market.
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