Tata Consultancy Services (TCS) witnessed a surge in its stock price on December 1 as the much-anticipated share buyback commenced. The company’s buyback initiative, offering Rs 4,150 per share, has generated significant interest among shareholders.
With TCS’s announcement in October about the buyback plan worth Rs 17,000 crore, shareholders owning a maximum of 57 shares as of November 25 are eligible to participate in this offering.
As of 11.01 am, TCS was marginally higher at Rs 3,501.10 on the National Stock Exchange (NSE), marking a 7 percent increase in its value this year compared to the Nifty’s 11 percent gain over the same period.
Understanding the buyback acceptance ratio is crucial for shareholders. While TCS officially set the entitlement ratio at 17 percent for small investors, past data from Sharekhan suggests the final acceptance ratio could range between 30-35 percent.
For shareholders holding TCS shares valued below Rs 2 lakh on November 25, leveraging the buyback option to tender their shares at the premium buyback price of Rs 4,150 seems promising, as advised by Sharekhan. They could reinvest in the same number of accepted shares post buyback at prevailing market prices for continued long-term investment.
Sharekhan’s recommendation to “buy” TCS shares aligns with this strategy, emphasizing the potential for reinvestment at relatively lower market prices post-buyback.
However, it’s essential to note that these insights are individual opinions and not financial advice. Shareholders are advised to consult certified experts before making any investment decisions, as reiterated by Chennaiprint’s disclaimer.
Understanding the implications of TCS’s buyback and its potential benefits is crucial for shareholders seeking to leverage this opportunity while considering long-term investment strategies.
[Disclaimer: The views expressed by experts are their own and not endorsed by Chennaiprint. Users are advised to seek professional guidance before making any investment decisions.]