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TCS board to meet next week to consider share buyback
The board of TCS, country\'s largest IT services firm, will meet next week to consider share buyback amid investors voicing concerns over huge cash piles big technology companies are sitting on.
The board of TCS, country's largest IT services firm, will meet next week to consider share buyback amid investors voicing concerns over huge cash piles big technology companies are sitting on.
The announcement comes within days of rival Cognizant unveiling its $3.4 billion buyback plan.
Although Tata Consultancy Services (TCS) did not disclose the size of the buyback, it said in a BSE filing that "Board of Directors will consider a proposal for buyback of equity shares of the company at its meeting to be held on February 20, 2017".
Shares of the Mumbai-based firm were trading 1.44 per cent higher at Rs 2450.50 on BSE.
The development comes at a time when Indian IT companies are under pressure to address shareholders' concerns, including large amounts of unutilised cash on the books.
TCS itself had Rs 43,169 crore cash and investments on its book at the end of December, 2016.
Following Cognizant's USD 3.4 billion buyback announcement, industry watchers had warned that floodgates for Indian IT firms could open with investors demanding similar action from domestic firms.
TCS' outgoing chief N Chandrasekaran had said yesterday that the company had received suggestions from investors over the need for certainty on dividend policy along with share buyback to distribute the cash.
"These two comments have come from investors and we will discuss it in the board," he had said.
Chandrasekaran also said that over the years, TCS has been increasing its dividend payments to shareholders.
Last week, Infosys' former CFO V Balakrishnan too had demanded share buyback to protect shareholders' interest.
Infosys, which is India's second largest software services firm -- is sitting on a cash pile of Rs 35,697 crore or USD 5.25 billion (as on December 31, 2016).
Balakrishnan, along with former colleague TV Mohandas Pai, had sought a USD 1.8 billion buyback in 2014 as well, just as its CEO Vishal Sikka was taking over.
While there are reports that Infosys may consider a Rs 12,000 crore share buyback, the company had declined to comment on the issue.
