The board of Tata Consultancy Services Ltd. has approved a proposal to buy back shares worth Rs 17,000 crore—its fifth such action since 2017.
India's largest IT services firm will buy back up to 4.09 crore shares representing 1.12% of the total paid-up equity share capital, according to an exchange filing.
The buy back price is set at Rs 4,150 apiece, a premium of 15% over Wednesday's closing of Rs 3,613 on the NSE. The announcement was made after market hours.
Currently, the promoter stake in the IT giant is 72.30%.
The buy back is proposed to be made from existing shareholders on a proportionate basis under the tender offer route using the stock exchange mechanism.
The buy back is subject to shareholders' approval by means of a special resolution through a postal ballot. The public announcement and Letter of Offer setting out the process, timelines and other requisite details will be released in due course, TCS said.
TCS also announced an interim dividend of Rs 9 per share. The second interim dividend will be paid on Nov. 7 and the record date is set on Oct. 19.
From March 9–23, 2022, the Tata Group firm repurchased 40 million shares of face value Re 1 each at Rs 4,500 apiece for an aggregate amount of Rs 18,000 crore, according to data available on the stock exchanges.
TCS had effected similar share buy backs in October 2020, June 2018, and February 2017.
Growth at the Mumbai-headquartered IT major was subdued in what is seasonally a strong quarter for India's $250-billion IT services sector.
Revenue rose 0.52% over the previous three months to Rs 59,692 crore in the quarter ended September. That compares with the Rs 60,641 crore consensus estimate of analysts tracked by Bloomberg.
TCS Q2 Results: Key Highlights (QoQ)
Revenue up 0.52% at Rs 59,692 crore (Bloomberg estimate: Rs 60,641 crore).
EBIT up 5.02% at Rs 14,483 crore (Bloomberg estimate: Rs 14,420 crore).
EBIT margin at 24.26% vs 23.2% (Bloomberg estimate: 23.78%).
Net profit up 2.42% at Rs 11,342 crore (Bloomberg estimate: Rs 11,372 crore).
Shares of Tata Consultancy Services closed 0.44% lower at Rs 3,659 apiece, as compared with a 0.62% advance in the benchmark NSE Nifty 50.
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