TCS buyback 2023: Date to finalize list of eligible shareholders of Tata Consultancy Services (TCS) for share buyback has been set on November 25, 2023. The Indian IT major has informed Indian stock market exchanges that it has set November 25, 2023 as TCS -repurchase record date. The IT giant also informed that TCS buyback record date has been set on ex-date basis, which means TCS shares would trade ex-buyback on November 24, 2023, i.e. Friday next week. So, a TCS shareholder buying TCS shares till November 24, 2023 and holding it on November 25, 2023 will be eligible to offer TCS shares in this. ₹17,000 crore buyback offer by the Tata group company.
According to stock market experts, IT companies are expected to report sluggish numbers in next few quarters due to economic challenges in the US and European countries. Since TCS gets a good amount of its business from the US and European countries, it is expected to report weak numbers in next few quarters. So, soon investors have a good opportunity to bid TCS shares in this buyback offer which was available at a price of ₹4,150 per share levels.
TCS buyback: Why you should tender your shares?
Advising short-term investors to ‘offer’ shares in an upcoming TCS buyback offer, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “TCS gets a good amount of its business from the US and European countries. After Moody’s downgraded US credit rating from stable to negative , the US economy has again come under the challenge. Recently announced US inflation data, weakness in the US dollar, unemployment claims data etc. signal a gloomy picture of the developed nations. Therefore, Indian IT companies including TCS are expected to report. sluggish numbers in next quarters.”
Avinash Gorakshkar went on to add that a company declares a buyback of shares in two cases – if it expects weakness in its companies or it expects a strong improvement in the near future. In case of buyback of TCS, there seems no trigger that can fuel TCS share price. Therefore, this share buyback looks to put pressure on the likelihood of retail sales in the near term.
Prashanth Tapse, senior VP — Research at MEhta Equities said, “Short-term trades can buy TCS before record date (25th Nov 2023) and use the opportunity to generate decent returns based on assumed rights ratio. Based on repurchase rate. ₹4,150 short term investors can generate ~18% ROI based on today ₹3519. In addition, investors would also take benefits from tax because the income generated from this buyback of shares is tax exempt. We advise investors to buy 48 shares ( ₹200000/4150) to get maximum entitlement under ₹2,00,000 retail category.”
Speaking on TCS’s buyback offer, Sonam Srivastava, Founder and Fund at Wright Research said, “The company’s consistent performance, indicated by an 8.7% YoY increase in net profit, suggests a stable outlook. However, the stock has experienced a slight decline in value recently .If you consider short-term gains, offering your shares could be beneficial because of the high buyback price.For long-term investors, it is essential to weigh this against the potential future growth of the company and the IT sector.The buyback reflects confidence from the management, which could bode well for the company’s future.”
Disclaimer: The views and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decision.
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Updated: 18 Nov 2023, 10:36 IST