Shareholders of India’s largest IT company Tata Tele Services (TCS) have approved a buyback plan worth Rs 16,000 crore. Last month, the Board of Directors of TCS approved a buyback offer of 5,33,33,333 equity shares at a price of Rs 3000 per share. On November 28, those names will be decided on who is eligible to participate in this buyback.
What is Buyback?
When the company buys back its own shares from investors, it is called a share buyback. In a way, it can be considered the reverse of IPO. The share buyback process is long. The board of the company passed the proposal to share the buyback. In this, the record date is fixed, which means that investors who have shares of the company for a specified time, can give their shares for a buyback.
Buyback Voting begins on 20 October
Voting began on October 20 at TCS regarding the Buyback, which lasted until 18 November. 99.57 percent of voters were in favor of the buyback offer. There was 100 percent voting on the buyback proposal from the promoters. The voting percentage of public institutional shareholders stood at 98.11 while the rest of the shareholders voted in favor of a buyback of 98.43 percent.
TCS gave Special Dividend Last Year
TCS CEO and Managing Director Rajesh Gopinathan had earlier said that the company focuses on the policy of returning its money to its shareholders. It has a cash reserve of Rs 58500 crore until September 2020. Last year TCS gave a special dividend and this year it is doing buybacks.
Wipro has Approved a Buyback Plan of Rs 9500 Crore
In October last year, the TCS board gave a special dividend of Rs 40 per share. Whereas in 2018, there was a buyback of Rs 16000 crore, in 2017 the company had a share buyback. The company says the buyback offer is part of its policy in which shareholders’ excess cash is returned. Apart from TCS, another IT company, Wipro, has also approved a buyback plan of Rs 9500 crore at a rate of Rs 400 per share.