Tata Buyback: Sold Your Shares After Record Date? Are You Eligible For TCS Buyback, Find Out!

Tata Group-backed Tata Consultancy Services (TCS) share price has floated near the Rs 3,500 level since the time the Rs 17,000 buyback offer was launched. Currently, the tech giant's stock is lower by 15% from its buyback floor price of Rs 4,150 per share. Three more trading days are left for the buyback offer to close. But what happens when you sell your TCS shares after the record date, are you still eligible to apply?

On Tuesday as well, TCS shares ranged between Rs 3,503 to Rs 3,537 apiece on BSE. TCS shares have been volatile since the start of this week.

On the previous day, TCS's share price ended at Rs 3509.65 apiece, flat on December 4th compared to the previous session's print.

The company's market cap stood at more than Rs 12.84 lakh crore.

TCS buyback was launched on December 1st, comprising a buyback of up to 4.09 crore equity shares at a face value of Re 1 each. The size of the buyback is approximately Rs 17,000 crore. For the buyback, TCS has fixed a floor price of Rs 4,150 per piece. The offer will close on December 7th.

The largest Indian IT firm in terms of market share, has divided its buyback entitlement ratio into two categories for investors. Firstly, for the reserved category of small shareholders, the buyback entitlement ratio is of 1 equity share for every 6 equity shares held on the record date. Secondly, for the general category shareholders, the ratio will be 2 equity shares for every 209 equity shares of TCS held on the record date.

However, one date is important to be eligible for tendering shares in TCS buyback and that would be its record date which was November 25th. The record date was set to determine the names of shareholders who will be qualified to apply for the buyback. But since November 25th was a weekend holiday, the share price turned ex-buyback on November 24th.

So shareholders who hold TCS shares by the end of November 24th, are eligible for the buyback.

Brokerage Kotak Institutional Equities has highlighted whether investors are eligible for TCS buyback if they either pledged or sold their shares, especially after the record date.

For selling shares after the record date, as per the brokerage's website, you are still eligible to apply for TCS buyback, since you were holding the shares on the record date. Hence, you can buy the shares back and tender them in the buyback.

In case if pledged your shares, Kotak's note said, that even if the shares are pledged, you are eligible for the buyback. For this, you do not need to give any unpledged request for the shares, once a buyback request is placed from your end, the system will automatically unpledge the shares. It needs to be noted, that the system will accept your TCS share buyback request only if you have enough margin after the release of such shares for the buyback. Therefore, investors need to that ensure sufficient margin is available in his or her accounts.

In case investors have taken a Margin Trading position in TCS as of the record date, Kotak stated that even still you are eligible to apply. However, you would need to first convert your Margin Trading position to a Normal position by placing a request with Customer Service. Once the position is converted to Normal, you will be eligible to apply for the buyback.

Brokerage Kotak Institutional Equities has recommended 'ADD' on TCS shares for a target price of Rs 3,760. Motilal Oswal has suggested buying for a target price of Rs 4,060.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.