In a recent stock exchange filing, Tata Consultancy Services (TCS), a prominent Indian IT company, has designated November 25 as the record date for its ₹17,000 crore share buyback initiative. This move comes following TCS’s announcement on October 11 to repurchase up to 4,09,63,855 fully paid-up equity shares, each with a face value of ₹1, at ₹4,150 per equity share.
As per TCS’s statement in the stock filing, “The Company has fixed Saturday, November 25, 2023, as the Record Date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the Buyback.”
This marks the fifth share buyback by the Tata group company in the last six years, representing 1.12% of the total paid-up equity share capital at ₹4,150 per equity share.
In conjunction with the buyback announcement, TCS reported a net profit of ₹11,432 crore in the second quarter of the fiscal year 2023-24, reflecting an 8.7% year-on-year increase. The net profit also witnessed a 2.4% quarter-on-quarter rise from ₹11,074 crore in the preceding June quarter.
Market experts view TCS’s buyback as a strategic move that is expected to boost confidence among investors and enhance TCS’s stock performance. Despite a recent decline of around 3.54% in the company’s stock value over the past month, analysts anticipate positive outcomes from the buyback, signaling potential upside in TCS stocks in the near term.
According to Sandeep Pandey, Director at Basav Capital, “TCS’s buyback is a strategic announcement by the Indian IT major, instilling confidence among investors. Management’s decision to buy shares signals potential upside in TCS stocks in the near term. However, it also indicates the company’s intent to curb sell-offs following the Q2 results of 2023.”
