Mumbai: Tata Consultancy Services (TCS) announced a proposal to repurchase Mega shares on Wednesday to appreciate shareholders.
This step is supported by a higher advantage and cash flow as a giant benefit software service from a digital ramp-up induced by a pandemic.
TCS proposed to repurchase RS 18,000 crore shares, which will be the largest purchase of shares by Indian companies and the first time the capital reduction painting.
TCS will buy 4 crore equity shares for 4,500 respectively.
The rate announced is at a 17% premium until Wednesday’s closing price of TCS shares, which ended at Rs 3,857 on NSE.
Proposal, the fourth in five years by the company, the peak of three transactions of previous shares repurchases each RS 16,000 crore each.
“The size of the RS 18,000 Crore Returns is translated to 1.08% of the outstanding TCS equity, which is not material per se.
But what is important is the intention of TCS to consistently appreciate shareholders through the repurchase program and dividend, reflect the gold standard of corporate governance , “said Research Head Sanjeev Sanjeev Sanjeev Hotam.
TCS vowed to start buying back shares in FY18 to distribute 80-100% of the free cash flow to shareholders.
During the third quarter of FY22, he had a cash flow of Rs 10,853 Crore, which was more than 100% of his profit.
According to information from the prime database of the financial content platform, some of the past major stock repurchasements in the past were carried out by IT companies.
In addition to TCS, Infosys and Wipro returned large cash to shareholders.
Moving TCS will also channel money back to the largest shareholder of Tata Sons.
Participating in the purchase will take the Tata Sons, which holds 72% in the IT giant, Rs 12,960 Crore.
Advantages made from the agreement will help Tata Sons pay for M & US and other corporate destinations.