Link - https://content.indiainfoline.com/Newsletter/TCS_Buyback_2023.pdf
I remember going through this the last time TCS did the buyback and was quite disappointed (4,500 buy back)
Going by the first table - acceptance ratio at 12%.
For new to TCS investors who wish to avail this buyback advantage, they need to have in InR 173,280 to acquire 48 shares based on current market price at 3610
Assume the the buy back acceptance is 12% so, makes a neat profit of 2,750.
After the sale, the holder will be holding 43 shares with a revised average cost at 3,547. Unlikely that the market price of TCS will shoot up to 4150.
The last buyback was at 4,500 (mar 2022), the market price since that day was not even close to 4,000
Although there is no tax on the sale, there will be brokerage and other cost. So the average will be higher than 3547.
Is it worth the effort to do this for new to TCS retail investor just to get this insignificant benefit.
For existing shareholders, this is a fine as we can sell what ever quantity the company is willing to buy back as the intention is to be invested. Once the sale is done, we can buy from the market the same quantity at lower price.
IIFL says it is an TCS buy back opportunity - is it really an opportunity?
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What if I bid tcs shares for buyback but don’t have those share in my depository. What will happen in that case? Is there any penalty for this?
If not unpledged, the buyback order will be rejected.
Capital used to purchase: did you buy this at 3402 (15 November) x 48 = 163,300?. The IIFL report was on October 12, when it was 3,610. The profit will be lower after a short-term capital gain on the remaining shares sold.
Anyway, these are small things; your point is understood.
I am a long-term loyal investor in TCS, and these guys never reward me.
“For small shareholders, the ratio of buyback (i.e. eligible number of shares to be tendered for the number of shares held) was determined at one share for every six shares held as of the record date. For other shareholders, it was two shares for every 209 shares held by them.”
They accepted just one share from what I tendered. On the contrary, as you correctly mentioned, new investors who put in money and take it out are rewarded more one share for every six share.
This is just not fair.
My purchase price was lower. Many people could have even purchased lower as the stock did take a beating right after the results.
Yes, STCG is a small fee to pay.
I truly wish SEBI brings in a regulation where, when there is a buyback, the record date should be the date of announcement. This will ensure that true small time investors gets rewarded and not these so called retail investors who buy the stock for this buy back benefit. Look at the disparity 1 share for every six held as against 2 shares for every 209 shares held. What happens if one owns 100 shares - they get nothing?
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Thanks !!
7% is pretty good return for couple of days investment ? what u say…