TCS share buyback offer open
Tata Consultancy Services (TCS) share price added nearly 2% in the early trade on December 18 as company’s Rs 16,000 crore share buyback offer opened for investors today.
TCS has decided to buyback upto 5,33,33,333 equity shares and the floor price for this offer has been fixed at Rs 3,000 per share. The offer, as per the schedule, will close on January 1, 2021. This is the third share buyback offer from the company after August 2018 and May 2017.
Investors are advised to tender their shares in the buyback offer if they want to hold for less than one year period given the good price offered by the company.
TCS share price has gained just 3.7% from the date of share buyback announcement till December 17, a day before the issue opening. But it already shot up 73% from March 19’s low and gained 31% in the current year 2020 so far.
Going by the past trends and historic data, TCS has given record-breaking compounded returns to every investor with an average 35-50% acceptance ratio.
Based on SEBI mandate that companies reserved 15% of the buyback for small shareholders with holdings of less than Rs 2 lakh as on the record date which means TCS has to buy Rs 2,400 crore from retail shareholders.
TCS in its offer document said the offer price represented a premium of 29.89% and 29.27% to the volume-weighted average market price of the equity share on BSE and NSE, respectively, during the three months preceding October 4, 2020, being the date of intimation to the stock exchanges of the date of the board meeting to consider the proposal of the buyback, and a premium of 18.92 percent and 18.88% over the closing price of the equity share on BSE and NSE, respectively, as on October 1, 2020, being the last trading date prior to the intimation date.
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