Shareholders of information technology major Tata Consultancy Services Ltd. (TCS) on Monday approved a planned buyback of up to Rs 16,000 crore, the biggest in the history of Indian capital markets.
The buyback proposal was approved with an overwhelming 99.81 percent majority in an extraordinary general meeting, TCS said in a stock exchange filing. This will be the company's first buyback since it listed in 2004.
Indian IT companies have been under pressure to reward shareholders from their increasing cash pile, either through dividends or buybacks. Infosys Ltd., Cognizant and HCL Technologies Ltd. have already announced record payouts to their shareholders.
TCS will buy back up to 5.61 crore shares under the approved proposal. This translates to 2.85 percent of its total shareholding. The price for the buyback had been set at Rs 2,850 per share.
The company, which is scheduled to release its fourth quarter earnings on Tuesday, had cash reserves worth around Rs 38,953 crore at the end of 2016, according to an earlier filing.
N Chandrasekaran, former chief executive officer of TCS and now the chairman of its parent company Tata Sons Ltd., had said in February that the company is building up cash reserves to meet requirements in case of any mergers and acquisitions.
Also Read: TCS Buyback Near-Term Positive, But Earnings Neutral: Analysts
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