I just read the board of TCS just approved the buyback, when is the record date and how do I apply for it?
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The board of Tata Consultancy Services (TCS) today approved the buyback of 7,61,90,476 Equity Shares aggregating to Rs.16,000 crore which is equivalent to 1.99% of the total paid up equity share capital. The company will be buying back shares at a price of Rs.2,100 per share.
Pre-buyback shareholding pattern
| Shareholders | No. of shareholders | No. of shares | % of shares |
|---|---|---|---|
| Promoter Companies | 9 | 2753347636 | 71.92 |
| Indian Financial Institutions/Banks/MF | 482 | 259039652 | 6.77 |
| FIIs/FPIs/NRls/Foreign National and OCB | 4,033 | 655821891 | 17.13 |
| Resident Individuals and others | 585438 | ]3,48,01,192 | 3.52 |
| Clearing Members | 1087 | 3645358 | 0.09 |
| Bodies corporate/LLP/Trust/NBFC | 2543 | 21919453 | 0.57 |
| Grand Total | 603592 | 3828575182 | 100 |
TCS had bought back shares worth Rs.16,000 cr last year and had also announced a bonus last month. The stock has also outperformed both the benchmark NSE IT Index and Nifty 50. The stock is up 39% YTD vs 22% returns generated by the IT Index as of writing this post
How to apply for the buyback?
We’ll open up an order collection window on Q and you can directly tender your shares. The allotted Buyback amount will be credited directly to your bank account by the company’s RTA.
How do I know, how many shares the number of my shares entitled for a buyback?
This can be found on the tender form that will be sent to your registered email ID by the RTA (Registrar and Transfer agents). However, you can tender any number of shares you choose to. The approved shares will be debited from your demat and the equivalent amount will be credited to your bank account. The excess shares you had tendered will be credited back to your demat.
What is a tender form and how does it look like? Do I also have to send it to my broker?
A tender form basically shows you the number of shares you hold as on the record date and the number of shares you hold that are entitled in a buyback. In case of this issue you don’t have to send us your tender form. Here’s a screenshot of a tender form that shows the shares you hold and the shares entitled in a buyback
When is the record date?
The record date is yet to be announced and we’ll update it here when it is announced.
Why do companies buyback shares?
Explained here.
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what is the record date for TCS buyback?
Yet to be announced. Just the buyback was approved today.
start of buyback will take 8-10 weeks as company has to take postal ballot approval .
Whats the effect of Buyback ( with premium) on share price? ie After bonus and dividend share price in cash market falls by the same value so if the TCS buyback is on 14% premium so likewise cash market price will fall by 14%?
Few query from my side.
As a retail investor to participate in buyback, what is the maximum number of shares can i buy ?
Is it 200000/2100 = 95 shares ?
or at the record date total value of my tcs shares holding should be below 200000 ?
on record date as per closing price your total holding should be up to rs 2 lakh rs for reserved category shareholder.
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I see a lot of people buying TCS shares now in a hope to benefit from Buyback.
Infact, one of my friends has bought shares worth 50L from all his family members’ account.
Is this a right move? I am new to Stock Market so just curious.
Sorry if this was too silly question to ask.
A lot depends on acceptance ratio . the MAY 2017 buyback of TCS @ 2850 had 100 % acceptance ratio for those holding up to rs 2 lakh worth of shares as per closing market price on record date.
Bonus cases do have official price adjustment but There is no official price adjustment from CUM to EX in buyback but surely market make the adjustment based on CUM BUYBACK trade and EX BUYBACK trade depends on likely acceptance ratio and difference in price offered .
Lets assume
A company has worth of 100 and total shares in market are 10. Then each share price in cash market will be 10.
Now company announces buyback for 5 shares at 20% premium @12. After buyback the worth of company will be 90 [100-(12-10)*5)] but shares will remain 10.
Now My understanding says…
the cash market price of each share will be 9 (90/10) which is reduced by 10%.
Am I correct?
Theoretically YES on first trading as EX BUYBACK …but as i said market forces will play a big role based on acceptance ratio .
Is it good to take part in buyback for TCS
yes provided you hold maximum rs 2 lakh worth of shares on record date…or to be on safer side 100 shares .
What about share holder having shares more than 2,00,000. Are they able to tender share. I know retail category is only 15%. What about remaining 85% What is procedure for them.
Procedure is same .the quota will be GENERAL quota instead of RESERVED quota.
Promoters of TCS to participate in the buyback
In terms of the SEBI Buyback Regulations, under tender offer route, the promoters have the option to participate in the buyback,” TCS said in a stock exchange filing today. “We would like to inform you that the promoter and promoter group of the company have communicated their intention to participate in the proposed buyback. Circular