TCS Buyback 2022

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 Offer Amount: ₹ 18,000 cr
Date of Board Meeting approving the proposal: Jan 12 2022
Date of Public Announcement: Jan 12 2022
Buyback Number of Shares: 4,00,00,000
Price Type: Tender offer
FV: 1
Buyback Price: ₹ 4500 Per Equity Share

Details of Buyback:

Further to our intimation dated January 7, 2022 and in terms of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the Board of Directors of the Company at its meeting held today has approved a proposal to buyback up to 4,00,00,000 (Four crore) Equity Shares of the Company for an aggregate amount not exceeding ₹18,000 crore (Rupees eighteen thousand crore only) (hereinafter referred to as the "Buyback Size") being 1.08% of the total paid-up equity share capital, at ₹4,500 (Rupees four thousand five hundred only) per Equity Share (hereinafter referred to as the "Buyback Price").

Salient financial parameters:

 
Particulars (in Cr) Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021
Sales 117,966 123,104 146,463 156,949 164,177
Expenses 85,655 90,588 106,957 114,840 117,631
Operating Profit 32,311 32,516 39,506 42,109 46,546
OPM % 27% 26% 27% 27% 28%
Other Income 4,221 3,642 4,311 4,592 1,916
Interest 32 52 198 924 637
Depreciation 1,987 2,014 2,056 3,529 4,065
Profit before tax 34,513 34,092 41,563 42,248 43,760
Tax % 24% 24% 24% 23% 26%
Net Profit 26,289 25,826 31,472 32,340 32,430
EPS in Rs 66.71 67.46 83.87 86.19 87.67
SMC Global TCS Buyback Report

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 [To be Announced] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [To be Announced], by selling your shares through your broker on NSE or BSE. 3. Then on [To be Announced] 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 44 Shares at CMP of Rs.3857 ( 2,00,000/4500=44)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback  1,71,422 1,71,422 1,71,422 1,71,422
No. of Shares buyback 15 22 33 44
BuyBack Profit 9645 14146 21219 28292
Profit 5.6% 8.25% 12.37% 16.5%
 

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 = 20-25%]

78 Comments

    Also if possible kindly open ma page for a Escorts open offer, Its a huge arbritrage opportunity available as any time sebi can give approval for open offer at 2000 Rs, Can see as March future is running under discount it can open in feb and will close in march.

    Current rate 1865 so 135 Rs arbritrage opportunity available with 60% ER and AR will be at higher side.

    Hii Admin, Kindly open a saperate page for Nucleus Software, I think most of forum member has participated and its a super buyback for all.

    So nucleus page will be a good case study for study to any new member.

    I have 50 shares of tcs in my account and I want to offer 20 shares in buy back wether I shall be considered Retail investor or not

      Sirji, it depends on how much your 50 shares are worth on the record date.
      If share price remains below 4000 rs then you will be considered as retail.

      If not then you’ll be considered as general category.

    If i have 10 share of TCS on Record date and
    20 share of TCS on tender date So,

    How many share are eligible for buyback?
    Plz replay

    I pray God to bless you all with health, peace, success, wealth n happiness on this auspicious occasion of MAKARA SANKRANTHI, being the first significant festival of the calendar year. I pray that all of you will learn to earn more n more throughout the year. Thank you all for your lovely, affectionate, helpful, valuable, knowledgeable n thought provoking messages. All the best to all of you.

    Hinduja Global System
    Please note that HGS although announced buyback, but is in risky territory. Yesterday was record date for Rs 150 dividend and postal ballot for bonus is already out. The buyback would come earliest in Q1 FY22-23. But company has Rs 4000Cr with them and BV comes out to be ~ Rs 2500 per share and current rate is Rs 3168/- So cheapest share in the pack.
    Still it would be interesting to see how the management plays as their intentions seems to be not very pure, as of now,

    Would request other learned members to suggest and provide more details.
    THANKS

      **Correction, BV is ~ Rs 3000 -3200 per share after considering Cash received.

          Kishan Ji,
          Record date is for DIvidend and not for Buyback. If you have share today is ex date and share would trade ex-dividend. So none can NOW buy for dividend…
          Buyback details are yet to come.

      Looks like this BB plan is announced to retain the shares price. Actual Buyback quantum and price will be announced post FY22 results Audit.

    Update – Hinduja Global System
    HGS board decided buyback of Rs 1000 Cr , after Bonus in around 2 months.

      Sir,
      Thank you very much for your kind information n happy MAKARA SANKRANTHI to you all.

    For Nucleus
    Current Data – For all (General and retail ) – Only 1.35X bids received i.e overall 73% acceptance (minimum)!!!
    Total – 22,67,400 equity shares, Demand – 30,75,732
    Lets wait till tomorrow morning
    Expecting 100% AR = Finger crossed…

      Sumit ji,
      Please enlighten whether we can understand that the AR in the Retail Category will be hopefully around 60%? Thank you.

        Sir,
        Acceptance ratio would be some where between 73% and 100%.
        The applications for all is only 1.3 times. so 73% is overall. I am sure that small share holders no, would not be large as total applications are also small.
        Why are you considering 60%. Please note individual also mean individuals with greater than 2 lac value shares. Individual and small share holders are different.

          Sir,
          Thank you for your valuable views. I am in the initial process of learning and hence unable to assess properly. You are knowledgeable n experienced and I stand nowhere before you. Please continue to help me with your precious views/ suggestions.

            SRK SIr, you are very humble.
            I am very thankful to You, Umesh Paliwal ji, and other boarders who provide information about Buyback.
            I feel extremely happy on my calculation and analysis of Nucleus and knowing that promoters are not participating, after reading postal ballot.
            We should share these information as no other would tell us…

              Sumit Ji, I invested in Nucleus based on your tip. Still waiting for final AR. Please keep these info coming especially in General category.

                  Sumit ji,

                  To be honest, every investor of Nucleus software, who have purchased the shares for the buyback are really fortunate enough as no one has anticipated this reasonably stunning possible AR. YES, IT WILL BE A JACKPOT as you have rightly mentioned. Thank you.

    What happens if someone holds more then 2 lakh worth of shares on record date? I believe they will not be considered as retail but HNI investor, right? How does buyback process works in that case?

    Why In the above calculation 4500 has been used as denominator to calculate number of shares purchased to be eligible in retail category?

    The computation of 2 lakh is done basis on buyback price or the price on record date?

      Sir,
      The closing price of the stock exchange where the number of shares sold/ purchased is more than any other exchange on the Record Date is the basis. Thank you.

      This is done so that retail investors’ total value of investment remains below 2,00,000 until price crosses buyback price. If the price on exchanges is above 4500, then there is no point of participating in the buyback……If we feel the price will not cross 4500 on Record date, then we can buy 2,00,000 amount of shares……

      I think even if price is above 4500, it will be worth to give in buyback as Income from shares tendeed in buyback is tax free wef 01-04-2019. Is it?

        Yes You are right. IF you have high tax implications, better to provide in BUyback..

    last time despite the ER at about 10-15%, the acceptance was 100% in retail category

    *TCS 2020 Buyback Detail
    1) Announcement Date – 07Oct-2020 Price 2735.95
    2) Record Date 28-Nov2020 Price (27-Nov-20) 2679.65
    3) Low after announcement 2600.
    4) Buyback opening 18-Dec-20
    5) Buyback closing 01-Jan-21
    6) Buyback price 3000.
    7) Post buyback price on 05-Jan-21 3093

    TCS Results Update:

    1. Dec-2019 = 39854 Cr
    2. Dec-2020 = 42015 Cr (5%)
    3. Dec-2021 = 48885 Cr (16% Growth)

    So, results are awesome….

    Highlights of TCS Results

    a) Revenue at 48,885 crore, +16.3% YoY; +15.4% CC YoY
    b)Industry-Leading Operating Margin at 25%; -1.6% YoY
    c) Net Income at 9,769 crore, +12.3% YoY | Net Margin at 20%
    d) Strong Client Addition: 10 New $100Mn+ Clients (total: 58); 21 new $50Mn+ clients (total: 118)
    e) Net Cash from Operations at 10,853 crore ie 111.1% of Net Income
    f) Net headcount addition of 28,238 |Workforce strength: 556,986
    g) Diverse and Inclusive: Women Employees Exceed 200,000; +68% growth in women at senior levels during 2016-21 | 156 Nationalities represented
    h) Building a G&T workforce: 100K+ market relevant skills gained in Q3 | 38K+ Contextual Masters identified
    i) LTM IT Services attrition rate at 15.3%; lowest in the industry
    j) Board recommends a buyback of shares to the tune of 18,000 Cr at 4,500 per share
    h) Dividend per share: 7.00 | Record date 20/01/2022 | Payment date 07/02/2022

      Very attractive buyback of Rs 18000 Cr and that also at very attractive price of Rs 4500. As Retailer are hardly 0.5% (as per 2020) in TCS but reservation of buyback shares are 15%, hence entitlement goes upto 40%. So, retailers just need to enjoy.

        NMC.LIFESTAR.CO.IN,
        On the previous occasion I.e., Dec. 2020/ Jan. 2021, the buyback price was Rs. 3000/- and the amount of the buyback was Rs. 16,000 crores whereas in the current buyback, the buyback price is Rs. 4500/- and the amount of the buyback is Rs. 18,000 crores. Please enlighten how the current buyback is very attractive. Thank you.

          Well, historically, buyback for retailers have been rewarding from TCS. Industry was expecting buyback of 16000 Cr, but it came with 18000 Cr. Isn’t this encouraging? Also, premium is 17% and we know that historically the buyback prices have crossed within 3-4 months.. So going buy trend, one can expect 15-20% returns over next 3-5 months (if trend works).. if this is not attractive, then I don’t want to explain what can be?? Please explain if you have any other opinion..

            NMC.LIFESTAR.CO.IN,
            Thank you very much for your kind response. Only in the academic interest, I placed my query because the amount is not in proportion to the price. Anyway, I agree that the company has not disappointed us.

          If you see history, Retail shareholding (those having shares worth below Rs 2L on record dates) have been less than 0.5% of overall company shares. I can think that over last 1 year, this number would have gone up, but may not have crossed 1%.

      Umesh ji,
      Thank you very much for your kind consideration to help the readers by sharing the details of the results. Please continue to enlighten.

    Hinduja Global, would be meeting for Buyback…
    FYIP.. Pl study and suggest.

      Company got lot of cash by selling Subsidiary.. Offering Rs 150/- as dividend, bonus 1:1 and Buyback.

      Seems to be very high risk…

        Sir,
        Hopefully looking forward for the details of the buyback to be known on 14/01 during the board meeting of the company. Thank you.

    this is a buyback where 10% profit could easily be made by retail category.
    The AR is likely to be 100%.
    And such stocks are good for the long run even otherwise.
    Check out the buyback price before committing your entire 2 lacs.
    ( I have invested 1/3rd on today’s price in 4 folios)

    last time pe tcs 1835 tha tab 2100 ka buy back huwa then now 3890 10/01/2022 i think 4200 is the buy back price for this year.

      Sir,
      Hopefully looking forward for my expected Buyback price of not less than Rs.4250/-. Of course, your estimated price of the buyback is also logical. Thank you n all the best.

        As per the Senior Research Analyst of Zee Business the buyback price is likely to be not less than Rs.4400/-. Hopefully looking forward for the details of the buyback.

    TCS-
    In earlier buyback from TCS, 3 out of 4 times, the AR was 100% as the market rate has exceeded the Buyback price. 1 time it was greater than 75%. So I take it to be a sure shot profit, unless some unforeseen happens.
    Now the important point would be the rate of entry for buyback..
    Would 3838 be Ok or wait for 3778, or buy even at 3939 ( The possible price on Monday).
    Respected members, kindly suggest.

      Sumit ji,
      Today I have purchased 20 shares @Rs.3880/-. I will purchase 20 more after the Q3 results to be announced on 12th. Buyback particulars will also be known on the day.

        SRK ji,
        I bought 100@3870, 50 @3888 and 20@3856… May buy some more if it falls now to 3700… My earlier average of 100 nos is around 3000… But would need to dump or re-align in portfolios, so as to come in small share holder, which would be approx 50 shares…
        Thanks

    Umesh ji,
    Very kind of you. Please continue to help by promptly responding as is being done. Thank you.

    FWD- TCS

    Free Cash flow for FY22(E) id Rs33,000 cr~85% payout is generally committed. So total payout can be ~30k cr,
    Dividend worth Rs5000cr is already paid, which leaves room for another 25-28kcr even assuming 100% payout.

    Thus, Buyback size expected at 20,000cr (~1.5% if equity) and this would leave room for further dividend of Rs15-Rs20 for H2 overall.

    Get ready guys for the mega buyback of the year….

      Umesh ji,
      Thanks for support.
      Your support is our main requirement for knowing and understanding buybacks.
      Request to continue with your support

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