This is the 3rd buyback announced by TCS in the last 4 years (2017, 2018 & 2020). Going by the past trends and historic data TCS has given record breaking compounded returns to every investor. Here in the current market scenario where TCS board Meeting was held on 7th Oct 2020 and approved Rs 16,000 crores buy back @Rs 3000 per equity share, lies an investment opportunity for retail Investors category which can be explained as below:
As per the SEBI Rules there is a reserved category of 15% for retail shareholders in each and every buyback announced by any company through tender route offer, which means TCS have to buy Rs 2400 Crores or approx. 0.80 crore equity shares from retail shareholders.
At CMP of Rs 2631.45, TCS scrip is available at a discount of 12.3% (1- (2631/3000)) in comparison to the buyback price or gives a return of 14%(368.55/2631.45). So new investors should start entering or buying/ adding TCS for maximum of 65 shares.
Identifying from the last TCS Buyback announcements it took nearly 2 months for entering in Ex -Buyback process and completed in another 6 weeks of time.
So it's nearly 3 weeks of time that has elapsed. TCS Board of Management is expected to announce the Ex- date anytime sooner in next - 4 to 5 weeks which could be 1st week of December. This is assuming that there are no changes made into SEBI Buyback rules since the last buyback of TCS.
|1||Date of Board Meeting approving the proposal of the Buyback||June 15, 2018|
|2||Date of declaration of results of postal ballot for special resolution by the Equity Shareholders of the Company, approving the Buyback||August4,2018|
|3||Date of Public Announcement for the Buyback||August 6, 2018|
|4||Date of publication of the Public Announcement for the Buyback||August 7, 2018|
|5||Record Date for determining the Buyback Entitlement and the names of Eligible Shareholders||August 18, 2018|
|6||Buyback Opening Date||September 6, 2018|
|7||Buyback Closing Date||September 21, 2018|
|8||Last date of receipt of completed Tender Forms and other specified documents including physical share certificates (if and as applicable) by the Registrar||September 21, 2018|
|9||Last date of verification of Tender Forms by the Registrar||October 1, 2018|
|10||Last date of providing Acceptance / Non-acceptance of tendered Equity||October 1, 2018|
|11||Shares to the Stock Exchange by the Registrar||October 3, 2018|
|12||Last date of dispatch of share certificate(s) by the Registrar / return of unaccepted demat Equity Shares by Stock Exchange to Seller Member / Eligible Shareholders||October 3, 2018|
|13||Last date of extinguishment of Equity Shares||October 10, 2018|
Also to add TCS had 100% acceptance ratios of Buyback shares for retail category shareholders with response of mere 36% approx in 2018 and 50% in 2017. (Source: https://www.sebi.gov.in/filings/buybacks/jun-2017/tata-consultancy-services-ltd-post-buyback-public-announcement_35089.html)
So one can invest in TCS shares and tender them in the buyback after consultation with their financial advisors as currently in the low interest rate regime where SBI FD returns roughly around 5.5 % on annual FD's, TCS is providing an handsome 14% returns (in just over 3 months time i.e. equivalent to over 50% on an annual basis) through buyback offer as on today.