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The board of India's IT major Tata Consultancy Services on Friday approved a Rs 16,000 crore share buyback plan, in an attempt to distribute available cash among its shareholders.
The company will buy back some 7.6 crore shares under the scheme at a price of Rs 2,100 per share.
TCS promoters hold 71.92 per cent stake in the company.
The stock traded at Rs 1,841, up 3 per cent in the afternoon trade on Friday when the news broke, which lifted the company’s market cap back to Rs 7 lakh crore.
"The buyback is proposed to be made from the shareholders on a proportionate basis under the tender offer route using the stock exchange mechanism in accordance with the provisions contained in the Sebi (Buy Back of Securities) Regulations, 1998,” the company said in its BSE filing.
The company in a filing on June 13 had informed the exchanges about the meeting of its board to consider the buyback programme.
Indian IT companies, last year, bought back shares in a bid to return excess cash to shareholders.
TCS had announced Rs 16,000 crore buyback of shares last year and followed it up with issue of bonus shares in April.
Infosys and Wipro had also come out with buyback offers of Rs 13,000 crore and Rs 11,000 crore last year respectively.
Share buybacks improve a company's earnings per share and help in shoring up the value during sluggish market conditions.
Stock Market
TCS board clears Rs 16,000 crore share buyback at Rs 2,100, 15% premium to current price
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