Buyback of tcs shares: TCS buyback offer: Acceptance rate at 26%, below expectations

NEW DELHI: Tata Consultancy Services (TCS) said on Friday that the acceptance rate for its Rs 18,000 crore share buyback offer was 26%, according to a media report. This is much less than expected 30-50 percent.

For 50 shares, the company will accept 13 shares, ET Now said. The lower acceptance rate is due to more people offering their shares than the market expected.

It also means that those who wanted to take advantage of the buyback offer, buying shares just before the buyback and selling after that, have to settle for lower profits, if any.

Before the start of the tender offer, Motilal Oswal analysts had calculated a profit of around 5% subject to an acceptance rate of 30% and the sale of shares not presented at Rs 3,818 after the repurchase. However, the ratio has been lower and the stock has yet to hit that number, meaning the actual profit for them would likely be even lower if they sold those stocks now.

TCS had offered to buy back up to 4,00,00,000 shares of the company for a total amount not exceeding Rs 18,000 crore, or 1.08% of the total paid-up share capital, at Rs 4,500 per share.

The offer was subscribed more than 7.5 times on Wednesday – the last day of contribution of shares. Investors offered 30.12 crores of shares in the repurchase process, which began on March 9, against the company’s offer of four crores of shares.

Sallie R. Loera