TCS Share Buyback Dates Expired: Everything You Need To Know About It

The company has set February 23, 2022 as the record date for determining the shareholders who will be eligible for the buyback.

The promoters of the IT giant Tata Sons and TICL will participate in the buyback offer. Tata Sons holds around 266.91 crore shares in the company and intends to tender 2.88 crore shares for the buyback, while TICL, which holds 10,23,685 shares, offered 11,055 shares.

Feather 4,500 each, both Tata Sons and TICL will have a profit of approx. 12,993 crores. TCS is seeking shareholders’ approval through a special resolution for buyback of equity shares of the company.

This is TCS’ fourth buyback since 2017 and the first for any company in the current calendar year. The company has approved share buyback 16,000 crore each in 2017, 2018 and 2020.

Here’s everything you need to know about buyback offers

Share buybacks, or share repurchases, occur when a company buys back its shares from investors or stakeholders. It can be viewed as an alternative, tax-efficient way of returning money to shareholders. The buyback is attractive from the tax point of view even after considering the 10% tax on Long Term Capital Gains (LTCG).

Usually, companies go for share buyback if it wants to increase the demand in the market. Share buybacks reduce the number of shares in circulation, which can increase the share price and earnings per share (EPS).

When a company buys back shares, it results in a reduction in the number of outstanding shares and the capital base. To that extent, it improves the company’s EPS and ROE. When EPS goes up, assuming the P/E remains constant, the stock price should rise as well.

How can you tender shares in buyback

Retail and general are two categories through which shares can be tendered in buybacks. The value of shares held in the demat account as on February 23, 2022 (record date) will determine the category through which an individual will be eligible to apply.

all shareholders holding shares of value 2 lakh or less will be considered under retail category. Whereas those who have shares worth more than 2 lakh will be considered under general category.

Investors can tender more shares than they are eligible, and whether these additional shares will be accepted for buyback or not will entirely depend on the acceptance ratio as decided by the company. The shares which are not accepted will be credited back to your demat account by RTA.

Investors whose shares are pledged are eligible for all corporate action benefits. However, they have to pledge the shares before tendering in the buyback.