Tata Consultancy Services Limited (TCS) BuyBack June 2018

(i) Tata Consultancy Services Limited (TCS) Board of Directors of the Company at its meeting held on 15 June 2018 has approved a proposal to buy back up to 7,61,90,476 Equity Shares (Seven crores sixty one lakh ninety thousand four hundred and seventy six only) of the Company for an aggregate amount not exceeding 16,000 crore (Rupees sixteen thousand crore only) (hereinafter referred to as the “Buyback Size”) being 1.99% of the total paid up equity share capital, at Rs.2100 (Rupees two thousand one hundred only) per Equity Share (hereinafter referred to as the “Buyback Price”).

(ii) 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: Aug 18 2018
Buyback Opening Date: Sep 06 2018
Buyback Closing Date: Sep 21 2018
Buyback Offer Amount: ₹ 16,000 Cr
Date of Board Meeting approving the proposal: Jun 12 2018
Date of Public Announcement: Jun 12 2018
Buyback Offer Size: 1.99%
Buyback Number of Shares: 76,190,476
FV: 1
Buyback Price: ₹ 2100 Per Equity Share

Details of Buyback:

Tata Consultancy Services Limited (TCS) Board of Directors of the Company at its meeting held on 15 June 2018 has approved a proposal to buy back up to 7,61,90,476 Equity Shares (Seven crores sixty one lakh ninety thousand four hundred and seventy six only) of the Company for an aggregate amount not exceeding 16,000 crore (Rupees sixteen thousand crore only) (hereinafter referred to as the "Buyback Size") being 1.99% of the total paid up equity share capital, at Rs.2100 (Rupees two thousand one hundred only) per Equity Share (hereinafter referred to as the "Buyback Price")

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 18.08.2018. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [06.09.2018 to 21.09.2018], by selling your shares through your broker on NSE or BSE. 3. Then on [03.10.2018] 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 95 Shares at CMP of Rs.1850( 2,00,000/2100=95)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback  175750 175750 175750 175750
No. of Shares buyback 32 48 72 95
BuyBack Profit 8000 12000 18000 23750
Profit 5% 7% 10% 14%

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.

Company Contact Details:

Tata Consultancy Services limited TeS House Ravelloe Street 21 0 S Marg Fort Mumbal400001 India Phone No. 91 2267789999 Fax No. 91 22 6778 9000 E-mail corporate.office@tcs.com website: www.tcs.com

    T D POWER SYSTEMS
    Buyback upto 30cr at Rs 256/sh (80% prem)

    At 256/sh: Can buy 11.7lkh shrs
    If they buy for eg at an avg of 200/sh; they can buy 15lkh shrs
    Hence atleast 3.5% to 4.5% shares extinguished

    GOING BY ANNEXURE-A
    Promoters won’t participate

    Finally +Ve intent!! (Twitter)

    TCS Final Acceptance Ratio

    Category———-No. of Shares Tendered ——–No. of Shares Accepted———%

    (i) General——— ——–6,47,61,904———————–10,77,67,024————-166.4%
    (ii) Retail ——————1,14,28,572———————40,16,984——————-35.15%

    In retail category, tcs has accepted 100% shares ( and for this are we not sad, because the mkt price is abt 100 rs above buyback ,😍☹️

    Dear Customer TCS 20 shares are allotted successfully against your order in BSE, under the Buy Back Settlement 2018088.

    What does that mean.?

      That means your 20 shares has been accepted under buyback at price of Rs 2100/-
      You must have received credit for sold shares today. If not, you will get it very soon.

    Hi,
    I was having 300 shares for tcs and received an.buyback offer to tender 5 shares only in buyback option , but I by mistake had participated for entire 300 shares.Today share is running at price near 2200/-.
    Query: Can I cancel this now if no Can TCS buy all my shares in buy back.Pls revert.if sny one can.help.

      Under retail category it seems 100 vs 38 shares acceptance ratio.
      I offered 100 shares and 38 has been accepted.
      If you have opted for 300 shares then your 114 shares will be accepted under buyback offer and remaining will remain with you !!
      Settlement date is tomorrow.

      I do not think so. It seems 100 shares exceeded retail category. In retail acceptance is 100 percent. But you are lucky. Rate now is above buyback so you can sell balance in open market

    *TCS Buyback* settlement will be done on 25th September which was earlier scheduled on 3rd October

    Got above forwarded message..

    Any one have information is it correct or not ?

    TCS BUYBACK UPDATE

    Bse apps 45781
    Nse apps 2897

    Total shares tendered 97718228

    Oversubscribed successfully

    Total Retails apps near 32500

    Tomorrow holiday

    1 day to go

    TCS buyback update

    Total apps bse and nse near 28000

    Retail apps near 18500 considering 95 shares

    Total shares tendered near 2.8 crore shares

    Retail 100% acceptance expected

    2 days to go due to
    Thursday is holiday

    Fii tendered 2.54 crore shares on bse

    I am eligible to tender 40 shares in tcs buyback but i have sold my shares in open market. can i now purchase shares from open market and tender them in buyback

      Sir, Record date is over . Those who have shares before 18.08.2018( Record date) can tender their share.

          Yes, it is possible. If shares sold after buyback record date then you are eligible for buyback. you have to buy it in the same demat account and should not offer more than shares available on record date.

    From BSE Website, there are 12 Cr Shares with Retail category (i.e having less than shares of Rs 2 L). Now 1.6 Cr shares are to be bought back from retailers, means entitlement ration should be 9%. However actual entitlement ratio for retail category is 44%. Can somebody explain how this variation came ?? I am unable to find details anywhere.

      Read the line carefully:

      “Individuals share capital upto Rs. 2 Lacs” and “No. of Shareholder= 69,54,10″ and ” No. of Shares= 12.16 Cr”
      Share Capital = No. of Shares* Face value= 2lacs*1= 2lacs

      ConclusionSo there are 695410 Individuals who are holding shares between (0-2 lacs) and total shares holding are 12.16 Cr.
      For buyback Retail are the person who holds between 0-95 Shares Which was roughly around 3.12 Cr.
      Hope your point is clear now.

        Sir, from where did you get the figure of 3.12 Cr ? Annual report showing shareholding pattern of 12 Cr only for individuals having less that Rs 2L shares. I am trying to identify this gap only.

          (i) The total number of Individuals Shareholders as of March 2018 was 5,46,716. As per the buyback price of 2100 at the time of buyback announcement, the investor having shares between 0-95 were classified as Retail Investor. The number of such shareholders was roughly around 1.64 Cr[ See Annual Report of no. of shareholders between 1-100] as of March 2018.

          (ii) The total number of Individuals as of June 2018 was 6,95,410 an increase of 1,48,694 new individuals as compared to March 2018. Assuming these newly added investors have bought shares between 1-100 for the purpose of the buyback.

          (iii) So we can conclude that the total number of individuals investor having shares in the range of 1-100 is around 1.64+1.48=3.12 Cr.

            Sir, thank you for taking the pain. I have more data here.

            As per BSE filing (June 2018), shareholding pattern is like below:
            Individual share capital upto Rs. 2 Lacs: Shareholders: 695410, No of Shares held: 121693343

            As per buyback letter of offer 2018: (https://www.tcs.com/content/dam/tcs/pdf/discover-tcs/investor-relations/corporate-actions/2017-18/tcs-buyback-letter-of-offer-2018.pdf)
            Based on the aforementioned definition, there are 5,92,509 Small Shareholders of the Company with an aggregate shareholding of 2,55,11,425 Equity Shares as on the Record Date, which constitutes 0.67% of the total paid-up equity share capital of the Company and 33.48% of the maximum number of Equity Shares which are proposed to be bought back as part of this Buyback.

            Now, I am confused as when BSE filing showed 12 Cr shares held under Individual share capital upto Rs. 2 Lacs in June, how this number came down to 2.55 Cr in July ?

            Does the BSE filing category “Individual share capital upto Rs. 2 Lacs” is not the actual retail category??

              Yes!! Now you got the point. The individual does not mean Retail.

              Individual means anybody who is holding shares between 1-200000.( It can be You, me, Ramdeo Aggarwal, Jhunjhunwala etc).
              and Retail definition of the buyback is, as on record date the total value of share you hold should not be more than 2 lacs( No. of Shares* market Price( on record date). In case of TCS for safety measure, we considered Retail investors who were holding shares between 0-95 because even if the price goes above 2100( the buyback price) you will be still be considered under retail category.

                Your answer raises my curiosity even more. Sorry for novice kind of query.

                Till now, I used to understand that anyone holding shares worth below 2L will be considered as small/retail investor. Now, you say that if Jhunjhunwala having script worth less than 2L will not be considered small/retail. How is this ? Is there something hidden in Retail definition? And in case of TCS, there are 3/4th people having shares less than worth Rs 2L and still they are not retail investors?

                Your answer will be interesting and I would love to hear. Thanks a lot.

                  Let me go through the basics:
                  1. Definition of Retail Investor in case of buyback- Any Shareholder having shares worth less than 2 lakhs( No. of Shares* Market of Value of Share) as on a Record date will be considered Retail Investors.
                  2. What you are referring to a Shareholding pattern is different. In the shareholding pattern, it is showing how many shareholders are there who have shares between 0-2 lakh( 2 lakh here means no. of Shares* FV).

                  Now Imagine, XYZ shareholder having 40000 no. of Shares of TCS as on record date would not be considered a retail investor because his net worth is ( 40000*2000(considering share price on record date) above 2 lakhs. However, you will find this person name in the shareholding pattern showing individuals holding number shares up to 2 lakhs.
                  Think Over It!!!!

                    Well, BSE shareholding clearly says “Individual Share Capital upto Rs 2 Lacs”. Then where is the confusion.

                    Are they reporting something wrong data then we need to find way to get it corrected.

    TCS now traded @ 2100
    Those who bought for only buyback purpose, can book profits as buyback rate is 2100

    TCS Today crossed 2100 wow!!! The Share currently trading above buyback price. It means literally TCS buyback is over.

    Tcs Entitlement
    Retail – *43 shares for every 96 shares held*
    Non-retail – 4 shares for every 235 shares held on record date

      And just for info, the actual acceptance will be 100% in retail category, based on past experience, and the current Mkt price being nearly same as buybak price, and many would have exited.

    TCS buyback
    Tender open – 6 sept
    Tender close – 21 sept
    Settlement – 3rd October

    *TCS likely buyback schedule*

    Buyback open – 28 Aug

    Buyback close – 10 sept

    Settlement date – 19 sept

    As defined under Regulation 2(1)(la) of the Buyback Regulations, a “Small Shareholder” is a Shareholder who holds Equity Shares having market value, on the basis of closing price on NSE as on Record Date, of not more than Rs. 2,00,000/- (Rupees Two Lakh only). As on the *Record Date*, the closing price on NSE, having the highest trading volume per Equity Share, accordingly all Shareholders holding Rs.200000/- divided by price of 18th Aug 2018 i.e. as on the Record Date are classified as ‘Small Shareholders’ for the purpose of the Buyback Offer.

    For TCS buyback, all shares that are alloted as bonus in June 2018 should not be submitted as that would imply a gain of 2100/- rs and attract a tax of 315/-
    So please be careful.

      agree rs. 315 tax

      but on original shares loss will arise

      suppose rs.2800 buy
      2100 buy back acceptance

      so rs. 700 loss arrived.

        No.
        (i) Suppose you have 40 shares at 2800.
        (ii) After bonus, you got 80 Shares @ 1400.
        (iii) If you participate in the tender process the following scenario would be there.
        a) Tendered Shares=40, then no issue of tax.
        b) Tendered Shares=60, accepted <40, then also no issue of tax.
        c) Tendered Shares=80, accepted 60, then on 20 shares, you will have to pay tax (315*20= 6300).
        d) Tendered Shares=80, accepted 80, then on 40 shares, you will have to pay tax(315*40=12,600).
        Hope it is clear. If any doubt please drop a message here..

          I have buy tcs on 9th August , total 95 should I have to pay tax? If yes than is there any other idea to avoid ths tax

        You can’t avoid tax dipen bhai. You have to pay tax at the rate of 15%*(selling price-cost price).

    12.16 crores shares hold by TCS retail shareholders as on 30th june 2018
    1.14 Crores shares reserved for TCS retail shareholders
    assuming 50% shares will tender in buy back
    so acceptance ratio 20% around
    Please correct me, if i am wrong. Thanks

    People looking at 120/130 ₹ difference now and buying TCS.but Acceptance Ratio is decreasing daily.

    Regarding *TCS BUY BACK* offer :- 🤔🤔🤔

    Retail share holding 5,46,716 (31/03/2018).
    Current share holding 6,95,410 (30/06/2018).

    *Increase Share Holders 1,48,694 ( @ 27% new retailers).*

    Now I am assuming buy back ratio @ 52% to 55% share.

      15 august market closed and 17 august bank closed and 18 august saturday. one has to buy max on monday 13 august to be eligible for buyback.

    (i) The total number of Retail Shareholders as of March 2018 was 5,46,716. As per current market price at the time of buyback announcement, the investor having shares between 1-100 was classified as Retail Investor(holding value <2 Lacs). The number of such shareholders was around 1.64 Cr.

    (ii) The total number of Retail Shareholders as of June 2018 was 6,95,410. That means 1,48,694 new retailers were added in the last three months who bought shares between 1-100.

    (iii) So we can conclude that the total number of retail investor having shares in the range of 1-100 is around 1.64+1.48=3.12 Cr.

    (iv) The TCS has reserved 1.1428 Cr shares for Retail Investors.

    (v) So assuming 75% of 3.12 Cr shareholders participate in the Tender process, then Acceptance ratio would be 1.1428/2.34=48%.

      12.16 crores shares hold by TCS retail shareholders as on 30th june 2018
      not 3.12 Crores shares

    on 6th august result for ballot paper will be out and with that record date will be given

      4th august was last date to participate in postal ballot and it was Saturday so obviously it was expected that the result will be announced on Monday but TCS did something more than ordinary by announcing result same day and also a record date.

      It is not yet announced. It is likely to announce in the first week of August.

    It looks a good buyback from TCS. Every retail investor should apply in this. The strategy should be to accumulate TCS on every fall and do averaging of shares since it will take 2 months time for buyback to happen. So don’t be in hurry to buy TCS let it cool down a little bit and then jump.

    dinesh bhai thanks for such a great information, now as the buyback amount is again same as last year 16000cr, what are your views and from where do you have collected such a superb information

    TCS buyback loss for bonus shares :-

    Investor holding only 100 bonus shares submitt shares for buyback

    As bonus shares alloted are just 3 months old and had zero value in terms of inccome tax and on receiving buyback amount at Rs.2100 investor has to pay Rs.315 as short term capital gain tax which is expected to be more then profit realised on diffetence of stock price of record date and buyback price.

      agree rs. 315 tax

      but on original shares loss will arise

      suppose rs.2800 buy
      2100 buy back acceptance

      so rs. 700 loss arrived.

    TCS Buyback Details 2017
    Public Announcement Date 20 February 2017
    Record Date 08 May 2017
    Buyback Opening Date 18 May 2017
    Buyback Closing Date 31 May 2017
    Buyback Price 2850
    Acceptance Ratio for Retail 100%
    Buyback Amount 16000 Cr

    Based on the above report, we are expecting 100% acceptance in TCS buyback with a profit of ₹26,000 for every application of ₹2Lac which comes to around 13% in 3 months (Annualised Return of 52%). This return is far more superior than any fixed deposit and everyone should apply in this buyback

    *TCS Buyback Analysis*

    *_Last Year Buyback Details_*
    Total Buyback Size – 16,000 Cr

    Amount Reserved for Retail Category – 2400 Cr

    No. of shares reserved for Retail Category – 84,21,052

    No. of shares validly tendered – 41,97,408

    Number of Valid Bids – 1,00,266

    Average Number of shares per bid – 41.86

    Average value of shares per bid – 1,19,300 (41.86*2850)

    *_Current Year Buyback Expectation_(Actual Announcement on 15th June)*

    Expected Buyback Size – 10,000 Cr

    Amount Reserved for Retail Category – 1500 Cr

    Expected Number of Valid Bids – 1,50,000 (Assuming 50% growth from last year considering more participation due to buyback awareness and increase in number of demat accounts)

    Average value of shares per bid – 1,25,000 (Assumed)

    Expected Value of bids received in retail category – 1875 Cr (1.5L * 1.25L)

    *Expected Acceptance Ratio = 1500/1875*100 => 80%*

    Expected Buyback Price – 2100 (Assuming 15% gap between CMP(1825) and buyback price)

    *Expected Profit per maximum application – ₹22,000*
    (100 shares *(2100-1825)*80%)

    Balance 20% shares can be held for long term.

    Considering last year data, there will be 2 – 2.5 months gap between the buyback announcement date and record date. So, Keep funds ready for TCS buyback and buy gradually before record date on corrections.