Tata Consultancy Services announced a Rs 16,000 crore buyback which would equal about 2 per cent of its share capital, its second stock repurchase in two years.
Indias largest IT services company said it would repurchase about 7.6 crore shares at Rs 2100 per share, about a 14 per cent premium to the price on the Bombay Stock Exchange. TCS shares were trading at around Rs 1840 on Friday on the BSE.
“We wish to inform you that the Board of Directors of the Company at its meeting held today at 11.00 a.m. and concluded at 2.35 p.m. has approved a proposal to buyback up to 7,61,90,476 Equity Shares of the Company for an aggregate amount not exceeding Rs.16,000 crore,” the company told the stock exchange in a filing.
TCS had bought back about Rs 16,000 crore of shares last year as well, as the company began to raise the amount it returns to shareholders. TCS plans to return about 80-100 per cent of the free cash flow it generates in a year.
Analysts said smaller rivals could also follow with share buybacks. Brokerage Sharekhan said it expects Infosys to launch another buyback this year. Wipro has bought back shares for the last two years.
Indian IT companies have been raising the amount of money they return to shareholders, following a letter sent by activist investor Elliott Management to Cognizant. Infosys and Wipro announced buybacks of Rs 13,000 crore and Rs 11,000 crore, respectively, last year. HCL Technologies announced a Rs 3,500 crore buyback in May 2017.
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