The largest software exporter TCS on Friday announced a Rs 16,000-crore share buyback, second in as many years, as part of its long-term capital allocation policy of returning excess cash to the shareholders.
Within minutes of the announcement, the shares surged 3 per cent in late trade hitting a new life-time high of Rs 1,849 on the BSE, taking its market capitlisation to a record Rs 7.06 trillion. The counter closed Rs 1,841.45 , up 2.75 per cent in a dull trade.
The company is offering to buy back shares at a premium of over 15 per cent at Rs 2,100 a share.
“The capital allocation policy is paramount to the company. We’ve always believed in rewarding the shareholders. We’ve steadily increased our payout to shareholders and now we are at the upper end of the band of 80 to 100 per cent bad,” managing director and chief executive Rajesh Gopinathan told reporters after the 50th AGM.
The company plans to buy back 7.61 crore shares or 1.99 per cent of the total paid-up equity share capital through the exercise, which follows a similar Rs 16,000-crore programme undertaken last fiscal.