TCS announces biggest share buyback in India

TCS announces  biggest share buyback in India

Tata Consultancy Services, India’s top software exporter, decided on Monday to buy back 5.61 crore shares for about Rs 16,000 crore.

That makes it the biggest buyback in the history of Indian capital markets. Earlier, the record was held by Reliance Industries, which had bought back shares for about Rs 10,000 crore in 2012.

TCS is facing the prospect of losing revenue from its US clients as the Donald Trump government introduces protectionist measures.

Its board of directors approved the buyback of 2.85% of the total paid-up equity at Rs 2,850 a share, TCS told the exchanges. In response to the announcement, its shares rose 4.08% (Rs 98.35) to end at Rs 2,506.50 on the BSE, with volumes of 1.98 lakh.

On the NSE, the shares rose 4.03% (Rs 97.10) to end at Rs 2,505, with volumes of 19.86 lakh. TCS has never traded at the price at which the buyback was announced on Monday.

The company had net cash of about Rs 43,100 crore at the end of December 2016.The decision will step up pressure on TCS’ peers such as Infosys and Wipro to announce similar buybacks.

Recent reports had suggested Infosys might go in for a buyback, but the company had said it would decide on it at “an appropriate time”.

Wipro completed a buyback for nearly Rs 2,500 crore last year, while Cognizant recently announced it would give back $3.4 billion to its investors via buybacks and dividends.

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