TCS BuyBack 2020

Tata Consultancy Services Limited (TCS) is engaged in providing information technology (IT) services, digital and business solutions. The Company’s segments include banking, finance and insurance services (BFSI); manufacturing; retail and consumer packaged goods (CPG); telecom, media and entertainment, and others, such as energy, resources and utilities, hi-tech, life science and healthcare, s-Governance, travel, transportation and hospitality, and other products. Its services portfolio consists of IT and assurance services, business intelligence and performance management, business process services, cloud services, connected marketing solutions, consulting, engineering and industrial services, enterprise solutions, IT infrastructure services, mobility products and services and platform solutions. Its software offerings include Digital Software and Solutions, TCS BaNCS and TCS MasterCraft, among others. It serves industries, including insurance, healthcare, retail, telecom and others

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Nov 28 2020
Buyback Opening Date: Dec 18 2020
Buyback Closing Date: Jan 01 2021
Buyback Offer Amount: ₹ 16000 Cr
Date of Board Meeting approving the proposal: Oct 07 2020
Date of Public Announcement: Oct 07 2020
Buyback Offer Size: 1.42%
Buyback Number of Shares: 5,33,33,333
Price Type: Tender Offer
FV: 10
Buyback Price: ₹ 3000 Per Equity Share

Details of Buyback:

Tata Consultancy Services Limited (TCS) Board of Directors of the Company at its meeting held on 07.10.2020 has approved a proposal to buy back up to 5,33,33,333 Equity Shares of the Company for an aggregate amount not exceeding 16,000 crores (hereinafter referred to as the "Buyback Size") being 1.42% of the total paid-up equity share capital, at Rs. 3000 per Equity Share (hereinafter referred to as the "Buyback Price"

Salient financial parameters:

 
Particulars( in Crs) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Sales 94,648 1,08,646 1,17,966 1,23,104 1,46,463 1,56,949
Expenses 70,167 77,969 85,655 90,588 1,06,957 1,14,840
Operating Profit 24,482 30,677 32,311 32,516 39,506 42,109
OPM % 26% 28% 27% 26% 27% 27%
Other Income 3,720 3,084 4,221 3,642 4,311 4,592
Interest 104 33 32 52 198 924
Depreciation 1,799 1,888 1,987 2,014 2,056 3,529
Profit before tax 26,298 31,840 34,513 34,092 41,563 42,248
Tax % 24% 24% 24% 24% 24% 23%
Net Profit 19,852 24,270 26,289 25,826 31,472 32,340
EPS in Rs 43.95 57.82 62.19 67.6 83.93 86.24
Source: Screener

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Tata Consultancy Services Limited (TCS) in demat or physical form as on record date [ 28.11.2020] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [18.12.2020 to 01.01.2021], by selling your shares through your broker on NSE or BSE. 3. Then on [12.01.2021] the payment will be given to you for accepted shares and unaccepted shares will be returned to your demat account.

Profit from the buyback on the bases of acceptance Ratio:

Buy 66 Shares at CMP of Rs.2752( 2,00,000/3000=66)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback  181632 181632 181632 181632
No. of Shares buyback 21 33 49 66
BuyBack Profit 5208 8184 12152 16368
Profit 2.87% 4.5% 6.6% 9.1%

Recommendation:

Review and Recommendation of Tata Consultancy Services Limited (TCS) Buyback from our IZ team is: 7/10 1-5: Fair 5-7: Good 7-10: Excellent. [Expected ER = 27%]

179 Comments

    I am still holding 500 share what can I do sell ? on Monday or hold for 450. Thanks in advance

    TataSons tendered more than 3.33 crore shares during the offer and earned almost 10k Crores from the buyback.

    was holding 82 shares on record date. must have been due to holding more than Rs.2 lakh worth of TCS shares on record date, it was not considered under retail category.

    Got email from TCS linkintime:
    2 Equity shares tendered = 66
    3 Equity shares accepted = 6
    4 Equity shares rejected/returned through Stock Exchange Mechanism* = 60
    5 Reason for rejection, if any = Acceptance on proportionate basis

        was holding 82 shares on record date. must have been due to holding more than Rs.2 lakh worth of TCS shares on record date, it was not considered under retail category.

    Yesterday I received SMS for debiting all 70 shares of TCS for buy back. Today I got the bill for sale of shares from Broker and got amount of Rs.210000/- credited into my bank account.

      Just check if it’s 21000 or 210000? I got contract note stating 7 shares and billing amount 21k. I have tendered 66 shares in total.

    Hello sir
    I have not yet received any message from broker and bank about my TCS share and no amount has been credited to my bank account .What steps should I take

    Just rec’d sms from my broker about all shares tendered being accepted as I could make out from the sms.
    Has anyone else rec’d similar messages from their DP/broker
    Days Position- -04/Jan-A1865 FA Bal : 376 Dr NSECM~~ TCS (-)70@3000.00

    Hello sir
    I hold 45 shares of TCS in my DEMAT and I have submitted all 45 shares for buyback even though my ER was only 18 .Will the remaining 27 shares be credited back to my DEMAT account and by when ??

      Ronit ji, as per our estimates, your all shares will be accepted in buyback. Enjoy the money rain.

    Umesh ji and Vinod ji, thank you very much for your prompt response. It is stated that the Acceptance Ratio in respect of retail investors would be 100%. If it is so, it will be a good beginning of the year.

      Hello sir it would be really helpful if you got reply to my query as I am a new investor

    Final Bids in Individual Category (HNI+Retails)

    BSE = 108 Lakh
    NSE = 12.31 Lakh
    Total = 120 Lakh

    Total shares reserved for Retail = 80 Lakh

    So, we can assume most probably the AR would be 100%.

    Enjoy the money rain….

    TCS Buyback – As expected settlement has been revised.

    Revised settlement 5th January from 12th January

    Revised obligation download date 4th January from 11th January.

    Enjoy the early payment along with 100% acceptance 👍🏼 https://t.co/nCaX1ieYbv

      Thanks! 100% AR information received about an hour ago – in the link you have given! How to check out?

    A very very happy New year to all. Umesh ji / Rohit ji/ Kedia ji, Subscription figures at the close may please be shared for information of all the forum members.

      Dear sir,
      Buyback of TCS in individual category subscribed 1.25 times but here non retails category also included mean holding above 74 shares and submit for buyback are also included in this category, Hence we are hoping for 100% acceptance in retails category holding 74 or below shares.

    TCS Buyback – Only 2 days left for tendering now.

    Acceptance ratio expected to be 100%

    Bid details of Day 8 below.

    If board meeting result of buyback is our on December 31,2020 record date should be what ? I am talking about Indian Tonner buy back…Who’s board meeting decision on buy back will be announced on December 31

    Entitlement ratio itna kum kyu aata h ,uska use kiya h.
    Acceptance ratio ka usse kuch link h?

      Entitlement ratio is minimum considering if everyone will holding share will apply for it. But is reality not everyone apply for buyback so actual acceptance ratio is always more than Entitlement ratio.

    *TCS Buyback update*

    Income from shares tendered in buyback is *Tax free* w.e.f. 1-Aug-2019.

    *What to do for your shares of TCS*

    Current Price Rs. 2929 per shares. You can sell all your shares in market at current price and book profit. Income will be taxable as Long term capital gain (10%) or Short term capital gain (15%)

    Or, you can tender your shares in buyback. We estimate that almost 70% shares will be accepted by the company. Profit from these 70% shares will be _Tax free_*.

    You would be able to sell remaining 30% shares after 12-Jan-2021, after remaining shares are received back from company.

      I have 200 sh of TCS . What should I do. How much I should tender for buy back and how much is expected to be accepted.

    NTPC ACCEPTANCE RATIO IS 41.75% I.E. 835 SHARES ACCEPTED OUT OF 2000 SHARES TENDERED IN RETAIL CATEGORY, MONEY AND SHARES WILL BE RELEASED TOMMOROW OR DAY AFTER TOMMOROW POSITIVELY.

    NTPC ACCEPTANCE RATIO IS 41.75% I.E. 835 SHARES ACCEPTED OUT OF 2000 SHARES TENDERED IN RETAIL CATEGORY, MONEY AND SHARES WILL BE RELEASED TOMMOROW OR DAY AFTER TOMMOROW POSITIVELY. ENJOY
    RE

      Entitlement ratio itna kum kyu aata h ,uska use kiya h.
      Acceptance ratio ka usse kuch link h?

    please guide regarding engineers india buy back means expected acceptance ratio, entitlement etc

    EIL BUYBACK RECORD DATE 1ST JAN.
    PLEASE OPEN A SEPARATE PAGE.
    PLS SHARE EXPECTED ACCEPTANCE RATIO

    Wipro Buyback offer date announced:-
    Date of Opening of the Buyback Offer Period Tuesday, December 29, 2020
    Date of Closing of the Buyback Offer Period Monday, January 11, 2021
    Last date for Settlement of bids on the Stock
    Exchange*
    Wednesday, January 20, 2021

    Today the volume of call of TCS is 73000 traded which shows the share will cross 3000 mark before the closure of buyback and call of jan month of Rs 3000 traded at 65 Rs.

    With price now of Rs 2860, AR is expected to be 100%. For tendering of share wait for the last date. If price is less than 3000, tender all the share. Otherwise can sell in open market. Please consider income tax angel also.

      Based on tax angle, will be better to submit in buyback as you will not be taxed on capital gains

    I have two shares only and I have placed order for both shares. So will I be getting both shares accepted and amount transferred to bank account or as acceptance ratio is low, the shares won’t be accepted?

    If i tender shares in TCS buyback will i get complete Rs. 3000 for the shares which are accepted. Or will the company deduct tax at source and give me the balance amount

    I have 200 shares of TCS on record date in my demat a/c. Now the Acceptance ratio of 40% is declared in retail category what will be the AR on HNI like 200 share holder

    I have total 48 shares of TCS but entitlement is only for 19 shares. Can i offer all my 48 shares for buyback or i can only offer upto 19 shares. Plz guide.

      Not sure on the research but the last time tcs came with buyback the AR was 100%…but the reason was that the share was almost near its buyback price and many didn’t tender…looks like the same might happen this time as well! But for sure it’ll be more than 60%…

    The best part in these buybacks is that we do not have to pay any tax on capital gains arising out of it.
    ( In view o newly introduced sec 115qa wef June 2019).
    I also have read the same in the tcs letter of offer as well

    @Market Wizard,

    As ER is 40% now what will be the Final AR? Need your opinion.

    According to me it should be between 60-70 %

    What is the reason of this big gap between expected acceptance ratio of 27 % and entitlement ratio of 41 %

        For Buyback Rs 20000 is the market price for retail, while the share holder data consider equity value of Rs 200000. Expected was based on Share holder data…
        So many people who are retail but shares more than 100, would be counted as retail in share holder but not in Buy back.

    Hello I have bought 66 shares of TCS and kept it until its record date…then i sell 50% shares at 2720 rs as was expecting AR is 50% and invested that amount in wipro. What should i do now? Sell wipro and buy TCS again? how much share i have to tender in buyback? And what will happen if i tender 66 shares which are on record date but my demat has now 50% share means 33 shares?Can someone guide on this?

        I have 200 shares of tcs in my demat a/c how much shares can I tender for buy back and how much shares will be acceptable. what should I do to get retail category benifit

        if i tender 66 shares of tcs then what will happen? do i have to buy shares again which i sold earlier?

    *TCS Buyback update*

    BuyBack Period

    Date of Opening of the Buy Back Offer Period Friday, December 18, 2020

    Date of Closing of the Buy Back Offer Period Friday, January 1, 2021

    Entitlement Ratio – 41%

    TCS Buyback entitlement ~41% ( 2 out of 5)

    *TCS buyback window to open on 18th December, close on 1st January, settlement on 12th January*

    TCS acceptance ratio will be on much higher side but certainly not 100%.Expected ar 77/80%.so far.

    Regards Anil Ji

    What if I have two demat account in A & B.
    I have 66 shares in A at record date and now I have sold those shares, should I can apply with Account B at time of buyback.

    What is the no of shares held on 28th november , Which will qualify for category Retail shair for Buyback purpose.

    I have purchased 74 shares as on 25th November, but ex-date is 26th. Record date is 28th.
    I found my shares are not allocated in demat on ex-date 26th, but available in the very morning of 28th record date. Except holding shares, I have not exercised any other activities for eg., not yet applied for buyback, also not participated in any evoting/opting for buyback etc. Will I be eligible for Buyback.
    If really not eligible, I would like to participate in few other IPO/buybacks such as Wipro,NTPC etc
    I checked with my stock broker and they are confusing me as not eligible as not had shares by 26th.
    Someone please provide better suggestions.

      I think you are eligible for buyback of TCS. NTPC record date is over. You can buy wipro before ex date to be eligible for buyback.

    Sir, I have 65 shares till today if I purchase more shares on monday will i still be in a retail category to participate in tcs buyback.

      With 65 shares in your account, you will be eligible for the retail category.

        Thank you.
        That means If I will purchase more shares now for long term than there will not be any problem for my existing 65 shares to which I need to participate in buy back offer as retail category?
        I want to participate in buyback offer as retail category using 65 shares and remaining shares which I will purchase now will be used for long term without disturbing my 65 shares for buyback purpose.
        Thanks

    Tomorrow is the last date to sell before the record date. Generally, we see a downfall in stock after the record date.

      What I have observed in recent is, shares get debited the same day (after closing) we sell. Doesn’t selling on 27th take away the entitlement?
      Also there was an intimation from Zerodha.

    I am confused. I voted in favour of buyback in evoting period as I had the shares before the cutoff date. And now again I have to participate in the tender offer? Why is it like this? What’s the difference and use of this? Please explain this to me.

      Boss, you are the minority shareholder. So your vote in favor of buyback or against does not matter. Just focus on participation in the buyback.

    You will need to hold the shares till the record date of 28th November to be eligible for the buyback. If you sell the shares on or before 28th November, the shares will be debited from your account towards early pay-in to the exchange in accordance with the new upfront margin collection requirements.

    Zerodha

    Can I buy 1 share each in different accounts ( different PAN ) , I will be eligible for minimum 1 share acceptance?

    Expected entitlement : 27-28%

    Expected acceptance : 60-62%

    Expected buyback open date : December 2nd week

    Expected settlement date : January 1st week

    Source: GK

      I do not think last time buyback offer was for 17%.
      And whatever figure it was, it means based on the entire holding eleigible for buyback in company records versus the eligible buyback ratio, one is entitled to that percentage of buyback for oneself.
      Now, once those forms come, one can tender more shares than you are eligible to give, and based on the fact that all ppl do not submit their shares in buyback, the company will then buyback more shares, which therefore leads to a higher percent buyback, known as the final acceptance ratio.

    An excellent article for fence sitters.
    Also has dates of the last buyback processes that happened.
    And even though the official buyback ratio was any 50%, the actual buyback was still 100%.
    If rhe previous timelines are to go by, we should be having buyback money in our account by mid of January 2021 or so.
    https://www.goodreturns.in/news/tentative-record-date-for-tcs-eligible-shareholders-for-tender-buyback-1172731.html

      Respected sir pleas give me answer . last time in TCS buyback , you say 17% buy back . but i got a offer for 17% only . So what is meaning ? PLZ ans

    Record Date 28th Nov 2020 (Sat)

    Ex Date 26th Nov 2020 Thus

    Cum Date 25th Nov 2020 We’d

    FO expiry last date 26th Nov 2020 Thus

    What is the last purchase date as 28th is the 4th Saturday. Can we purchase on 26th or we have to purchase on 25th to become eligible for buyback.

    I want to know that Can I tender more share in respect of eligible share for buyback means suppose I have 1000 share of any company before record date and my eligible share for buyback as per accepting ratio of 50% is 500 , can I tender full 1000 share for buyback.

      Entilement shares will be accepted first…

      Secondly extra shares (proportionally) upto shares held on Record Date

      If any shares left behind than extra shares above what held on record date will be accepted

    Small shareholders owning shares as on the record date of Rs 2 lakh or less will get reservation in the buyback offers to the extent of 15 per cent of the buyback size. The reservation for small shareholders would be Rs 2,400 crore. As per the current ownership, 665,322 shareholders (holding up to 100 shares of TCS) have 2.01 crore of shares
    Read more at:
    https://economictimes.indiatimes.com/markets/stocks/news/what-brokerages-said-on-tcs-stock-post-q2-results-buyback/articleshow/78548034.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

    TCS – Small investors holding (less than 2 lacs) as of 30/Sep/2020 = 121605157 (12.16 cr shares)

    Total shares to be bought for small share holders = 0.8 cr (80 lac shares / 15% of 5.3 cr shares)

    Acceptance ratio is going to be 7-20% – Nothing great here for small share holders in terms of returns from buyback

      The figure 12.16 Cr is the holding of shareholders with Share Capital of 2 lacs. Since the face value of TCS share is Rs. 1 . It is the no of shareholders having shares less than 2 lacs. Share holders with Share value less than 2 lacs will be much lower than this.
      please correct me, if I am wrong.

      Yes theoretically you are right, the entitlement ratio is around 8% however since many don’t end up giving in buyback (awareness, lazy or long term investors) hence acceptance ratio is normally much higher. In 2018 if I am not wrong it was almost 100%

        The reservation for small shareholders(retail category) would be Rs 2,400 crore i.e. 0.8 Crore Share. As per the current ownership, 665,322 shareholders (holding up to 100 shares of TCS) have 2.01 crore of shares. So the Acceptance Ratio will be more than 40% for retail category.

        Let us not forget that anyone holding above approx 70 shares will be excluded from retail category. So we can safely rule out a few out of the above, but we need to factor in ppl who have bought for buyback as well post 30th sept.
        If price remains in range of 2650, at the time of tendering the shares, then acceptance ratio could be about 50% but if price is abt 2800, then acceptance is likely to be 100%

    Both wipro and tcs are good investments even otherwise in the current scenario.
    Both are rated highly as investment worthy stocks.
    So at current rates, do not think one can go wrong even if all shares are not bought back and one can hold on to the remaining ones for atleast another one more year.
    One simply can not go wrong if above is in mind at abt 2650-2700 for tcs and 325-350 for wipro.

      TCS is a good buy at around 2600 & Wipro is a good buy at around 330 in my opinion. The Average cost of unacceptable share will come down so that we can hold it for long term as both are good companies..

    Postal Ballot result is about to declare by 18th November 2020. Record Date is expected between 25/11/2020 to 10/12/2020

    bought 33 shares half the quantity at 2650 /- for buy back purpose let’s see how it go.

    I think a safer range to invest for buyback purpose is any 2700 and not more than that

      Why do you think so sir. With 2752 CMP and 75% acceptance also we get 6% still much better than FD rate. Please educate if I’m missing anything

        start accumulating below 2700 then only you can come profitable. AR won’t be 75 it will be max 45 %

        FD interest rate is yearly. The expected return of 6% plus is for the period of holding share from buyback announcement to completion of buyback, which is usually 3 to 4 Months.

      After record date price could fall
      IT stocks are already quite heated
      If US market tabd due to domestic or covid reasons
      Indian mkt will also tank
      Less upside more risk
      That’s why he suggested to buy at no more than 2700 levels
      I concur with him
      Wipro looks a better buy

    TCS Buyback could end up with 50-70% final Acceptance Ratio if moderate number of investors opt for tendering.

    If there is a price run up in TCS owing to its performance, the Accetpace can be 100%

    The buyback offer is subject to the approval of the members. 15 th October is the record date for dividend.

    TCS price will easily cross 3000 before the Record date.

    Please provide analysis..
    To buy or not?
    And to what rate??
    Market and IT stocks seems to be much heated……………

    I fear TCS can do googly this time by NOT applying Tender route…
    Already increased nearly 10%…
    I would wait till clarity is received.

    Already 5 % higher
    Now if buyback prblm ce is set to be 2800 then no benefit
    If 3200 then 20% difference will be there based on which risk can be taken

    TCS Buyback 2020
    Expected size – 16,000 crores
    Expected price – 2800- 3,000/-
    Expected Mode – Tender route

    Final Analysis of TCS Technologies 2018 ( Return Analysis)

    1. Buyback Announcement date: 12.06.2018—– Share Price was 1850.

    2. 95 Shares bought at Rs. 1850 means an investment of 1,75,750.

    3. Retail Acceptance Ratio was 100%. i.e. out of 95 shares, 95 shares have been buyback by the company. Profit on Accepted Shares–23750

    4. The final Accepted Shares were taken back on 03.10.2018.

    5. Overall we can say a profit of 23750 on an investment of 1,75,750 in 3 months which is equivalent to a 54% Annualized return.

      COMING TO THE PRESENT BUYBACK 2020, RETAIL ACCEPTANCE RATIO IS 100%. This means that the acceptance ratio, which is talked about is for non retail investors?
      Is my understanding correct?

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