TCS' Rs 17,000 crore share buyback opens: Check important details and expert opinion

TCS share buyback: The Rs 17,000 crore share buyback programme by IT major Tata Consultancy Services (TCS) opened today (December 1). In October, along with the Q2 results release, the company announced its plan to buy back 1.12 per cent of the company's equity. In its fifth buyback offer till date, TCS has agreed to buy back up to 4,09,63,855 fully paid-up equity shares of the face value of Rs 1 each at Rs 4,150 per share. The buyback is at an 18.3 per cent premium considering stock's closing price as on November 23. Note, November 23 was the last date to buy the scrip to tender it in the buyback as the stock traded ex-buyback on November 24.

The company announced its buyback via the tender offer route, using the stock exchange mechanism in accordance with the Securities and Exchange Board of India. In a buyback offer made through the tender offer route, the company fixes a particular price at which shares are bought back from the investors.

Now that the record date for the TCS buyback has already passed, if you held the company's equity as of November 25, then the company has now clarified a few details for investors to tender their shares.

Here is the complete schedule with respect to the same:

Buyback opening date: December 1

Buyback closing date: December 7

Last date and time for receipt of documents by the registrar for the buyback: December 7, 5 pm (IST)

Last date for providing acceptance or non-acceptance of tendered shares to the exchanges by the registrar- is December 13

Last date of settlement of bids: December 14

Further, the buyback entitlement is also out, and for retail investors with shares valued up to Rs 2 lakh, 1 equity share will be for every 6 equity shares held on the record date. While, for all other eligible shareholders, there are 2 equity shares per 209 shares as of the record date.

Analysts’ view on TCS share buyback

"TCS buyback acceptance was around 26 per cent last year for retail investors for a similar size of a buyback, so the acceptance ratio should be similar. For non-retail shareholders, it was less than 3 per cent, so it doesn't move the needle for non-retail shareholders. Retail investors should give their holdings wholeheartedly and could buy back later a lower price in the market, noted independent market expert Ambareesh Baliga.

On the technical front, the IT counter is expected to see a correction in the near term. Jigar S. Patel, Sr. Manager-Equity Research, AnandRathi, told Zee Business that the stock, after making a double-bottom structure around Rs 3,330–Rs 3,340, saw a 200-point pump in TCS. Having said that, at the current juncture, TCS has stalled near Rs 3,525–Rs 3,550 (refer to the chart). Before continuing its upside momentum, one can expect a small correction until Rs 3,400–Rs 3,420.