What was the final outcome of the TCS buyback and what was the extent of oversubscription?

The buyback of TCS has been completed and the biggest beneficiary has obviously has been Tata Sons. Out of the total pay-out of Rs.18,000 crore in the buyback, Tata Sons earned Rs.11,164 crore by tendering a total of 24.81 million shares in the buyback offer. Tata Sons alone accounted for 62% of the total buyback amount, but that is hardly surprising considering that Tata Sons owns more than 70% of the stake in TCS.

The other significant beneficiary to the tune of Rs.528 crore from the TCS buyback was the Life Insurance Corporation of India or LIC. There were two categories in the buyback acceptance. The small shareholders (those owners of TCS who are holdings up to Rs.2 lakhs) tendered a total of 25.3 million shares. This approximately translates into 4.22 times the size of the total number of shares reserved for this particular category.

The rest of the tendering was done by the non-retail category, which is predominantly the large and substantial holders in TCS. A total of 4 crore shares were bought back by TCS at Rs.4,500 per share, which translates into a total buyback pay-out of Rs.18,000 crore. This buyback reduces the equity of the company and hence it is EPS accretive. Post buyback, the holdings of Tata Sons in TCS increased from 72.19% to 72.30% of the paid up equity base.