TCS' promoter groups to participate in company's Rs 18K buyback offer

Bengaluru, 15 January The promoters of Tata Consultancy Services, Tata Sons and Tata Investment Corporation Ltd (TICL), will participate in the upcoming buyback of the IT services major.

TCS plans to buyback shares worth Rs 18,000 crore and the proposal is currently under the consideration of its shareholders.

In the postal ballot notice sent to the shareholders, it has been mentioned that Tata Sons and TICL intend to participate in this share repurchase programme.

In 2020, TCS held a share buyback worth about Rs 16,000 crore in which group holding firm Tata Sons had tendered shares worth Rs 9,997.5 crore. Similarly, the company repurchased shares worth Rs 16,000 crore at an offer price of Rs 2,100 per share in 2018.

The postal ballot said the current buyback is "in line with the company's shareholder-friendly capital allocation practices of returning excess cash to shareholders, thereby increasing shareholders, thereby increasing shareholder value in the longer term, and improving the 'Return on Equity'.

Indian IT firms are conducting share repurchase programme on a regular basis to give back their surplus cash to shareholders. Infosys, Wipro, HCL Technologies and some mid-tier IT services firms have conducted share buybacks in recent years.

Most large IT services firms also have come up with capital allocation policies that mandate a large percentage of their surplus cash to be returned to their shareholders. Apart from buybacks, companies are also returning their surplus cash through dividends.