MUMBAI: Tata Consultancy Services (TCS), India’s largest IT services firm, on Friday said its board has approved the proposal to buy back shares worth up to Rs 16,000 crore.
TCS will repurchase 7.6 crore shares, or 1.99 per cent of the total paid-up equity, at Rs 2,100 per share. This is 17.17 per cent premium to Thursday’s closing price of Rs 1,792.25. This is TCS’ second such buyback in two years and is expected to be completed during the second quarter of the current financial year.
The move is in line with TCS’ plan to return 80-100 per cent of free cash generated to shareholders through dividend or buyback. Buybacks typically lead to an increase in company valuations, improve earnings per share and return surplus cash to shareholders. They also support the stock price during volatile market conditions.