Tata Consultancy Services on Oct. 11 approved the proposal to buyback shares worth Rs 17,000 crore.
The company will be buying back 4.09 crore shares, amounting to 1.12% of the total equity.
Offer Price
The maximum price of the share buyback has been set at Rs 4,150, which is at a premium of 16.08% to Wednesday's closing price.
Tender Offer Or Open Market
The buyback will be done through the tender-offer route.
In a tender offer buyback, the company announces a fixed price at which it will buyback shares from existing shareholders. For example, Wipro's buyback was fixed at Rs 445 per share.
Reason For Buyback
The buyback is part of the company's way to ensure value enhancement for shareholders.
When Is The Buyback?
The company is yet to announce the opening and closing dates of the buyback.
How Many Shares Tendered Will Be Repurchased?
The number of shares that the company will repurchase depends on the acceptance ratio.
According to SEBI rules, 15% of the total tender offer is reserved for the small shareholder category—an investor with an investment of not more than Rs 2 lakh in the company as of the record date. The total public holding in this company is 27.70%, and the small shareholder category holding stands at 16.44 crore.
As mentioned above, 15% of the buyback offer of 4.10 crore shares would be reserved for the company's small shareholders, which amounts to 0.6 crore shares. Hence, the acceptance ratio for the retail category would be 3.74%.
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