Here are some of the key highlights of the TCS buyback offer.
· The buyback was announced by TCS on 07 October along with the announcement of its quarterly results for Sep-20
· The total buyback will entail 5.33 crore shares at Rs.3000 per share. The actual effective date will be communicated by the company subsequently.
· The total size of the buyback will be Rs.16,000 crore. Incidentally, this is exactly the size of the buyback undertaken by TCS in the years 2017 and 2018 too.
· In terms of funding the buyback, TCS has Rs.35,000 crore in its balance sheet in the form of cash and short term investments. So internal resources are hardly a problem.
· In the past, buybacks by TCS have jacked up prices in the short term for TCS but have done little beyond that.
· That is largely because investors interpret buybacks as a signal that the company does not have too many investment avenues and is seen in the same way as dividends.
· Long term investors in TCS must keep in mind that buybacks don’t add value per se as what they add in EPS, they lose in PE valuations.
Here are some of the key highlights of the TCS buyback offer.
· The buyback was announced by TCS on 07 October along with the announcement of its quarterly results for Sep-20
· The total buyback will entail 5.33 crore shares at Rs.3000 per share. The actual effective date will be communicated by the company subsequently.
· The total size of the buyback will be Rs.16,000 crore. Incidentally, this is exactly the size of the buyback undertaken by TCS in the years 2017 and 2018 too.
· In terms of funding the buyback, TCS has Rs.35,000 crore in its balance sheet in the form of cash and short term investments. So internal resources are hardly a problem.
· In the past, buybacks by TCS have jacked up prices in the short term for TCS but have done little beyond that.
· That is largely because investors interpret buybacks as a signal that the company does not have too many investment avenues and is seen in the same way as dividends.
· Long term investors in TCS must keep in mind that buybacks don’t add value per se as what they add in EPS, they lose in PE valuations.