TCS Buyback 2022 Review

TCS Buyback 2022 review is on the positive side keeping a long-term view about the country’s largest software service exporters. The share buyback size of Tata Consultancy Services is huge and the financials are strong enough to hold the stock instead of tendering them in the buyback offer.

Tata Consultancy Services, the country’s largest software services firm has approved Rs 1,800 crore share buyback with the shares priced at Rs 4,500 apiece. The IT firm also announced a dividend of Rs 7 per share with the record date being set as 20th January 2022 and the payment date of dividends as 07th February 2022.

TCS BUY-BACK

The Buyback price is 16% higher compared to its last traded price at the time of the buyback announcement. Revenue of the IT firm grew 16.3 percent in the quarter under review to Rs 48,885 crore from Rs 42,015 crore in the corresponding period last fiscal year. The company added more than 28,000 employees on a net basis, taking the total number of employees to 5,56,986 as of December 31, 2021.

Why Companies Opt For Share Buyback?

There are many reasons for companies to go for a share buyback.

  • Generally, companies opt for a share buyback when it accumulates surplus cash and has no alternatives for investment and other opportunities.
  • Usually, in buybacks, the shares are bought back by the company from its existing shareholders at a price higher than the current market scenario and are shown as treasury stock in its financial statements.
  • Buyback of shares results in higher EPS (Earning Per Share).
  • Buybacks send a positive signal as promoters and people involved in the company management believe that the share is undervalued.
  • The buyback also refers that a company doesn’t need cash to cover interest payments and capital expenditures.

TCS management after their board meeting also issued a statement that the buyback size does not include transaction costs, applicable taxes, and other incidental and related expenses.

TCS Buyback 2022 Review For Retail Investors

With strong financials and a huge share buyback size, retail investors with a mid to long-term view should hold it and not tender now. The strong business environment and cloud remain its key growth signs. To get cash benefits instantly, investors can tender their share once the record date is announced but would lose the long-term benefits. With a large buyback size, the company’s potential increases too for higher profits, according to market analysts.

TCS Share Buyback Eligibility

To be eligible for the share buyback, investors should hold TCS’s shares in their Demat account as on record date. The buyback record date is not yet announced. Not only the Demat account but also the investors who have the company shares should hold in the physical form as on record date and fill out the form as per instructions of the company.

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