Tata Consultancy Services : A Step-by-Step Guide to Benefit from TCS Share Buyback

Tata Consultancy Services (TCS) Announces Fifth Share Buyback in Six Years Worth ₹17,000 Crore, Offering Short-Term Investors 18% Return on Investment.

Tata Consultancy Services Buyback Summary

Buy Back Price4,150
Record Date25 November 2023
Minimum lot of Share application47 Shares
Current Market Price3,500
Probability of Acceptance10 Shares of retails investment

The buyback of up to 4.10 crore fully paid-up equity shares at ₹4,150 a share will represent 1.12% of the total paid-up equity share capital. Prashanth Tapse, Research Analyst-Sr VP Research, Mehta Equities Ltd, suggests short-term traders buy TCS shares before the record date (Nov 25) to generate decent returns based on assumed entitlement ratio. With the current market price of ₹3,400, short-term investors can potentially generate an 18% return on investments at ₹3,500.

Investors can also enjoy tax benefits as the income generated from the buyback of shares is tax-exempted. Cholamandalam Securities suggests investing ₹3,51,700 (100 shares at ₹3,517) and the minimum number of shares that will be bought back is three, with a profit on accepted buyback of ₹1,900. However, investors should note that the profit will vary at the current market price (₹3,498).

According to Chola Securities, any increase in the per-share price (from ₹3,517) will result in additional profits, while any decrease below ₹3,475 will result in a portfolio loss.

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