TCS shareholders approve up to Rs 16,000 crore buyback plan

India's largest IT services firm Tata Consultancy Services (TCS) on Wednesday, November 18, 2020, said that its shareholders have approved the buyback plan of up to 5.33 crore fully paid-up equity shares up to Rs 16,000 crore. The buyback has been fixed at Rs 3,000 per equity share.

TCS board of directors, earlier on October 7, 2020, had approved a proposal to buy back up to 5,33,33,333 equity shares of the company for an aggregate amount of up to Rs 16,000 crore.

In a regulatory filing to stock markets, TCS said, "Based on the report of the scrutinizer, we hereby inform that the members of the Company have duly passed the special resolution approving the Buyback."

The voting, which started on October 20, 2020, and ended on November 18, 2020, saw 99.57 per cent of the votes being cast in favour of the buyback offer. There was 100 per cent voting in favour of the proposal by the promoters, 98.11 per cent by public institutional shareholders and 98.43 per cent by other shareholders.

In addition to this, the company's board has also fixed November 28, 2020, as the record date for buyback.

TCS in the regulatory filing said, "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."

TCS CEO and Managing Director Rajesh Gopinathan had earlier said the company is focused on its policy to return capital to shareholders. The Mumbai-based company's cash reserves stood at Rs 58,500 crore as of September 2020. Last year, TCS had offered a special dividend and this time it is undertaking a buyback, he had noted.

In October last year, TCS' board had declared a special dividend of Rs 40 per equity share. In 2018, TCS had undertaken a share buyback of about Rs 16,000 crore. The company had conducted 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.

Besides, Wipro, the smaller rival of TCS, has also announced a buyback plan up to Rs 9,500 crore at Rs 400 per equity share.

(With PTI Inputs)