TCS shareholders approve buyback plan. Here’s what you need to know

Rajesh Gopinathan, TCS chief executive and managing director, had said earlier that the company is focused on its policy to return capital to shareholders.

Tata Consultancy Services (TCS), India’s largest IT services firm, has said its shareholders have approved its up to ₹16,000 crore share buyback plan. TCS’ board of directors had last month approved a proposal to buy back up to 5,33,33,333 equity shares of the company at ₹3,000 per scrip for an aggregate amount not exceeding ₹16,000 crore. TCS’ smaller rival Wipro has also announced an up to ₹9,500-crore buyback plan at ₹400 per equity share.

Logos of Tata Consultancy Services (TCS) are displayed at the venue of the annual general meeting of the software service provider in Mumbai in this file photo. (Reuters Photo)

“....the members of the company have duly passed the special resolution approving the Buyback,” TCS said in a regulatory filing on Wednesday.

Here is what you need to know:

1. The voting, which started on October 20 and ended on November 18, saw 99.57% of the votes being cast in favour of TCS’ buyback offer. There was 100% voting in favour of the proposal by the promoters, 98.11% by public institutional shareholders and 98.43% by other shareholders.

2. In another filing, TCS said it has fixed November 28 as the record date for the buyback. “...the company has fixed Saturday, November 28, 2020, as the Record Date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the Buyback,” it said.

3. Rajesh Gopinathan, TCS chief executive and managing director, had said earlier that the company is focused on its policy to return capital to shareholders.

4. The Mumbai-based company’s cash reserves stood at ₹58,500 crore as of September 2020.

5. Last year, TCS had offered a special dividend and this time it is undertaking a buyback. In October 2019, TCS’ board had declared a special dividend of ₹40 per equity share.

6. A year before that, TCS had undertaken a share buyback of about ₹16,000 crore.

7. TCS had held a similar share purchase exercise in 2017 as well. The company had said its buyback offer was part of its long-term capital allocation policy of returning excess cash to shareholders.

(With PTI inputs)