New Delhi: The board of Tata Consultancy Services Limited will consider the proposal for buyback of shares in its meeting on October 11. TCS has said that there is a board meeting on October 11, in which the decision on the proposal for buyback of shares will be taken. Along with the share buyback proposal, the board will also consider and approve the earnings for the quarter and six months ending September 2023.
If the TCS board approves, it will be the fifth time that the technology company will buyback shares. Although the company has not mentioned the size of the share buyback, it is likely that it will be the same as before. Before this, it had withdrawn its shares from the market 4 times. Earlier in January 2022, TCS had bought back shares worth Rs 18,000 crore through the tender offer route. Then the company had offered to buyback shares at Rs 4,500 per share.
TCS shares have increased by a net of 11% so far this year 2023 and it reached an 18-month high of Rs 3,634.95 on the National Stock Exchange on Friday. The stock closed nearly 1% higher at Rs 3,621.40. TCS’s net profit from operations in the quarter ended June was Rs 11,353 crore or 102.5% of net income.
Amid weak demand and adverse economic environment, the earnings of IT companies are expected to be slow in the next September quarter. The company’s plan to consider share buyback is in line with analysts’ expectations. While share buybacks will provide support to stocks, Dalal Street investors will keep a close eye on the FY2024 environment.
What is share buyback and why does it happen? (What is Share Buyback)
Share buyback means that the company buys back its shares from the shareholders. Share buyback reduces the number of company shares available in the market and increases the real value of the stock. However, share buyback reduces the equity capital of the company. Share buyback gives investors a higher price for selling the stock, thereby earning them huge profits.